You had the discretion to allow them to do it?

So why wasn't it changed? What were the reasons it was not changed from what you have heard?

Thank you both, and thank you for your reports, which, of course, will be made part of the record.

That is the kind of bureaucratic speech which I think sends the message to people you regulate.

In other words, they did not accomplish very much.

I personally think they didn't want us there.

OTS recommended to WaMu that it should compensate loan processors based on the quality of the loans that they made.

So since there is no regulation on the books for these kinds of risky practices, how are we going to get them on the books?

About the only time OTS showed backbone was against another agency's moving, in your view, into your turf.

What consequences can you expect when most customers only make minimum payment in terms of the borrower's reaction to a payment shock?

You are the cop on the beat or supposed to be. Not a ticket, not a fine for this?

Now, it was the Option ARM loans in 2008 that was one of the major reasons that investors and depositors pulled their money from the bank.

That interagency position is not binding, is that correct?

There is no reason why we can't work together.

You can't assess the strength of the borrower and that has got to be at the foundation of underwriting, risk assessment, risk management of any of this.

the ``S'' is misplaced. It probably is delayed as much as possible. That would be a DAMAP--delay as much as possible--instead of ASAP.

Can you use the words, 'Folks, your progress is inadequate?' Are you able to tell them that?

What, if any, guidance should be given to institutions by regulators relative to that issue as to putting into the stream of commerce the mortgages which are bad mortgages?

Now, as WaMu's condition continued to worsen in the summer of 2008, the FDIC conducted a capital analysis, recommended to OTS that a 4 rating was warranted.

This is not effective regulation. It is feeble regulation, year after year after year.

When I asked, what was the reason given by OTS, they said, 'We weren't given any reasons.'

Why can't you tell someone you regulate, 'Folks, you made a commitment 6 months ago, and it was conditioned'?

This is the second in a series of four Subcommittee hearings examining some of the causes and consequences of the 2008 financial crisis.

Asset quality. Weak asset quality. It brought on the liquidity problems.

We hope that unity that you heard here, and the American people will hopefully hear from this committee and this Congress, will help you in your efforts to gain support internationally for what you're trying to do.