Ex-Regulator Edwin Gray, Foe of Keating, Quits Post : Banking: Troubled Miami thrift he headed was sold to investors without federal help.
Edwin J. Gray, the former federal regulator who tangled with Charles H. Keating Jr. as well as the savings and loan industry, has quit his job as president of a troubled Miami thrift and returned to his La Jolla home.
Gray, 57, left Chase Federal Bank last week after it was sold without government assistance to a consortium of investors that include the Harvard Management Group in Boston and Thomas A. Cooper, a former Bank of America executive. The group also bought another troubled Florida thrift and merged it into Chase.
The former chairman of the Federal Home Loan Bank Board, which was replaced in 1989 by the Office of Thrift Supervision, said Tuesday that he has not had time yet to begin searching for a new job. He said he plans to look for a position in the financial services field, preferably on the West Coast.
Gray said he was proud of the job that he and others at Chase did in reviving the thrift and getting new owners with $108 million in new capital--a cushion against losses--without resorting to a taxpayer bailout.
“My only goal was to see that Chase Federal was recapitalized without any federal assistance,” Gray said Tuesday. “I had done everything in my power as a regulator to avoid the immense dollars involved in a taxpayer bailout.”
As the nation’s top thrift regulator from 1983 to mid-1987, Gray warned against the crisis he foresaw in the industry and instituted stricter rules to rein in some of the excesses that federal thrift deregulation in 1982 had wrought. In the process he alienated many industry leaders, whose trade organization had pumped millions of dollars into the campaign coffers of state and federal lawmakers.
He also battled Keating, who once tried to get him off the bank board by offering him a job at Lincoln Savings & Loan, the Irvine thrift that has since become one of the nation’s biggest S&L; failures. Keating, convicted of racketeering and securities fraud, now is serving state and federal prison terms.
It was Gray who, in April, 1987, was the first regulator called to a closed-door meeting with five U.S. senators acting on Keating’s behalf. The senators, who became known as the Keating Five, met a week later with other federal officials in an attempt to get an unusually long audit of Lincoln completed.
At the same time, however, Keating was raising more than $1.3 million in political donations for the senators. A Senate Ethics Committee later chastised the senators for soliciting contributions from Keating while helping him. It meted out its severest criticism to former Sen. Alan Cranston (D-Calif.).
