Office of Thrift Supervision (OTS)
Candlefocus EditorThe OTS was created by the Federal Home Loan Bank Act of 1989, and replaced the FSLIC (Federal Savings and Loan Insurance Corporation). The OTS was responsible for directing the activities of Federal savings associations, including the overseeing the operation and settlement of the Insured Savings Account Program (ISAP). It worked in coordination with the Federal Deposit Insurance Corporation based on the interstate banking statutes, to provide coverage for all depositors in banks and savings associations. The OTS was also responsible for the examination and supervision of Federal deposit insurance corporations and supervising their compliance with directives from other governmental agencies.
The OTS monitored all activities related to the safe legal and efficient management of thrifts, including the activities of their officers, directors and employees; the quality of their investments and loans; their financial resources; and their capital adequacy. The OTS also safeguarded customer deposits, enforced disclosures and competition requirements; prevented the under-capitalization of thrifts; and made available the financial resources required to maintain operating liquidity.
Along with supervision, the OTS also provided access to funds in the form of direct-loan programs, loan guarantees, and risk-sharing agreements. These funding sources helped to ensure that thrifts remained financially sound and kept them operating profitably. This ensured that the overall financial system in the United States was stable and secure.
In addition, the OTS provided tax credits and other incentives for thrift customers and companies to encourage the establishment and growth of thrift institutions. These incentives promoted the expansion of the thrift industry, which in turn provided more money to individuals and businesses for investments.
The OTS was dissolved in 2011, and its powers were transferred to the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau. This change was part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Responsibilities for the management of savings and loan associations were redistributed among the other agencies. The OCC gained powers over banks and thrifts, while the CFPB regulated institutions considered to be "predatory lenders". Despite its dissolution, the OTS had helped shape the future of the thrift industry in the United States.