After Weeks on Leave, Bank Watchdog Resigns

A top banking regulator caught up in a fraud scandal has retired, the Treasury Department announced today.

Scott M. Polakoff had been acting director of the Office of Thrift Supervision, which oversees thousands of banks and savings and loans.

Treasury Secretary Tim Geithner suspended Polakoff in March, after the department’s inspector general found the oversight chief had ordered a bank to fraudulently backdate financial reports. After the bank failed in May, Treasury officials identified it as BankUnited of Florida.

In an interview Friday, Polakoff said “there is no correlation” between his decision to retire and the IG’s findings, which he said “was not an accurate representation of the facts.” He said he was sharing his concerns directly with the office of Treasury IG Eric Thorson.

Polakoff’s predecessor, John Reich, retired in February in the midst of the same fraud probe. Another OTS regulator caught up in the scandal, Darrel Dochow, resigned in February. The IG found Dochow had approved fraudulent backdating by IndyMac; Reich was not identified as having been involved with the backdatings.

“Scott has served the government with distinction over his career,” said Polakoff’s replacement, OTS Acting Director John E. Bowman. “We wish him the best in his next endeavor.”

Matthew Jaffe contributed to this post.