On Exhibit 51b, if you will take a look at that exhibit, this is a 2005 memo entitled, 'Insured Institutions' Exposure to a Housing Slowdown.'

I guess one of the issues, obviously the big issue we will be looking at in the next two hearings is the dumping of high-risk loans into the financial system as a whole.

The other thing, and one that I think you all are dealing with in the regulatory reform, is the fact that you are not doing the borrower any favor here, either.

I think your folks did have knowledge of it long before today.

But the output, the outcome.

I should not have to remind you the FDIC has no role until the PFR (the primary regulator) rules on solvency.

We followed our normal protocols under the interagency agreement, and on August 14, we sent the OTS a letter.

as a matter of policy, they should have allowed that.

Stated income is probably not right.

Did you have trouble, both of you, tracking OTS' findings and whether WaMu implemented them?

I would not cite that in defense of your feeble enforcement, that there is a money-laundering order.

I do not under any circumstances want to discuss this on Friday's conference call.

OTS has principal responsibility. FDIC doesn't.

Crystal clear, no participation on any OTS 1 and 2 rates exams.

Thank you very much, Mr. Bowman.

Your agency had primary responsibility, not FDIC.

Well, that is exactly the kind of testimony which I think is going to be very helpful to us as we proceed with the legislative response.

The FDIC wanted to do it a lot earlier than you did, right?

You did not want FDIC to be meddling around in your backyard.

There has to be a right way to handle them.

There is nothing to prevent them in the rules today.

I want you to take a look at Exhibit 44.

What kind of efforts did you make to change these practices?

Should we legislate? I am tempted, frankly--and I may do it--to just ban negatively amortizing loans.

So that in this exhibit, which is based on the second quarter of 2007, is it accurate to say that FDIC assigned WaMu a C rating?