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OCC Makes Legal Case for United Western's Failure
May 21, 2012
American Banker
Banking lawyer Frank Bonaventure is quoted in the American Banker on this story about the failed United Western Bank, which was closed by the Office of Thrift Supervision in 2011, and the subsequent suit brought by United Western against OTS. Frank comments on the degree of disclosure that’s come out of the litigation.
The motions are each side's attempt to make its best and most holistic argument. In laying out its position, the OCC gave rare insight into the regulators' point of view in dealing with a troubled institution. The filing detailed United Western's declining Camels rating — a confidential rating examiners use to assess an institution's health. In 2007, United Western was rated a 2 on the 1-to-5 scale, with 1 being the best. It was downgraded to a 5 just three weeks before its failure.
"If it was an open bank, you wouldn't have seen that kind of disclosure, litigation or no litigation," says Frank Bonaventure Jr., a partner at Ober, Kaler, Grimes & Shriver and a former OCC lawyer. "The ratings are confidential because they allow examiners to talk freely without causing an adverse action against the bank like a run. You obviously can't have a run on a closed bank, but you still don't see them disclosed often even after a failure."
www.americanbanker.com/issues/177_98/bank-failure-litigation-regulators-1049496-1.html (Subscription required)
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