Reinstate Ban in Delta Case, Agency Asks

The U.S. Office of Thrift Supervision, frustrated with its own court-like proceedings and thwarted by a federal appeals court panel, sought a hearing Friday in a case involving the former president of a failed Westminster savings and loan.

The OTS wants the full U.S. 9th Circuit Court of Appeals to reinstate the agency’s order that had banned Young Il Kim, who ran Delta Savings Bank, from the financial industry for life.

The agency, in issuing its order in April, 1993, had ignored findings by its own administrative law judge that it did not have sufficient evidence to ban Kim for alleged misconduct at the thrift, which regulators seized three years ago. Kim appealed the agency’s decision.

A three-judge appeals court panel sided with the judge and threw out the ban two weeks ago, ruling unanimously that Kim’s conduct “in no way” approached the level of culpability required by federal law to impose such sanctions.

In asking for a hearing by the appellate judges, OTS argued in court papers that the panel’s opinion “misapprehends the statute’s culpability requirement” and “overlooks material facts.”

Kim, a certified public accountant, could not be reached for comment.