Gilleran resigns as head of OTS

This resignation happened over a week ago, but it hasn't received much attention in the corporate media except for this short article in the Washington Post.    Readers of the banking diaries on daily Kos will remember that Gilleran pushed through highly controversial Community Reinvestment Act (CRA) regulatory changes to give medium-sized banks less stringent CRA exams. The background for his CRA attacks is here.

The National Community Reinvestment Coalition had called for Gilleran to resign because he pushed thorugh the changes in spite of receiving overwhelmingly negative public comments during the comments period.  A number of Congressional Democrats had also harshly criticized Gilleran.

Given the Bush Administration's general unwillingness to change course because of criticism, it's rather doubtful that this criticism alone forced Gilleran out. The Bush Administration does have a musical chairs problem with the Board of the Federal Deposit Insurance Corporation (FDIC) that may have contributed to Gilleran leaving his post before his term expired.  By law the FDIC must have three members from one political party and two from the other. The heads of the OTS and OCC are also required to be on the FDIC board. With a Democrat, Jerry Hawke, ending his term at the OCC and Bush replacing him with a Republican, John Dugan, something has to give somewhere else.

We'll all wait to see what breed of Democrat Bush can come up with to replace Gilleran.