Where were you when the housing bubble was building to crisis proportions? Some government regulators were counting their bonuses, it appears. The Associated Press, which filed a Freedom of Information Act request to obtain government payroll data, found that during the boom years of 2003 - 2006, as the crisis was being primed by lax lending and risk-laden balance sheets, the agency watchdogs in charge of supervising U.S. banks handed out "at least $19 million in bonuses." The agencies include the Federal Deposit Insurance Corporation, the Office of Thrift Supervision and the Office of the Comptroller of the Currency.
The money was given to regulators for their -- ready for this -- "superior performance." You just can't make this stuff up, folks...and I live in Hollywood, where fantasy IS reality.
Most of the money was given to the financial examiners who were supposed to be closely watching the banks and what the banks were doing. Even in 2008, the year the world as we knew it all but came to its financial end, the Office of Thrift Supervision was still giving out bonuses to more than 90 of its financial examiners for their "exceptional work," reports the AP.
These were the same regulatory agencies that failed to flag the coming crisis, and that internal government investigations subsequently found to be lacking in their supervisory roles.
A spokesman for the FDIC, which gave out most of the bonus money, had no comment for the AP. An OCC spokesman, on the other hand, invoked the standard banker defense when he cited the need to "recruit and retain the very best people." He also noted that the banks his agency regulated tended to do better than some of the others. You gotta give this dude high marks for trying. Like I said at the outset, you can't make this stuff up.
Charles Feldman is a journalist, media consultant and co-author of the book, "No Time To Think-The Menace of Media Speed and the 24-hour News Cycle." He has written about real estate related issues for several years.
