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U.S. banking official Darrel Dochow retiring after furor over IndyMac failure

Darrel Dochow played a role in the 1989 failure of Irvine-based Lincoln Savings & Loan and in last year's collapse of Pasadena's IndyMac Bank.

February 21, 2009|William Heisel

A federal banking official who played a role in both the 1989 failure of Lincoln Savings & Loan and last year's collapse of Pasadena's IndyMac Bank is retiring.

Darrel W. Dochow had earlier been relieved of his duties as Western regional director of the federal Office of Thrift Supervision. That action came in December after the Treasury Department's inspector general found that IndyMac had been allowed to report its finances in a way that delayed disclosure of the extent of its problems.

"I must admit that being singled out for a series of highly personal attacks after the failure of a prominent thrift has been painful, but I have been humbled by the tremendous support . . . by many people who truly know me and the job that I have done over the years," Dochow wrote in an e-mail to colleagues Friday.

IndyMac was seized by the Federal Deposit Insurance Corp. in July and is expected to cost the agency more than $9 billion. Uninsured depositors have lost an estimated $300 million.

Two decades ago, as head of supervision and regulation at the Federal Home Loan Bank Board in Washington, Dochow ignored pleas from California state regulators to intervene in the impending collapse of Irvine-based Lincoln Savings & Loan.

He was eventually demoted, but worked his way back up the ranks and was promoted in September 2007 to be OTS' regional director for the West.

The Times reported in December that the Office of Inspector General was investigating how IndyMac was allowed to file financial statements that indicated that a capital infusion received from its parent company in May had happened in March. That was an important distinction because it allowed the bank to meet a key benchmark for the first three months of the year and keep its doors open an additional two months, raising its interest rates and luring millions in additional deposits.

In a May 9 phone call, Dochow agreed to allow IndyMac to record part of a $50-million capital infusion received that day from IndyMac's parent company as if it had been received before March 31, the inspector general said. IndyMac told Dochow that it had a "note receivable" for $18 million on its books for March 31, but it never produced the note. Two months later, IndyMac failed and had to be taken over.


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