On February 9, 2009, AABD wrote a letter to OTS Director John Reich asking the OTS to stop requesting savings and loan holding companies which have received TARP CPP investments or have applied for the investments to sign broad capital commitments. AABD also requested the OTS to rescind any agreements entered into with savings and loan holding companies which commit the holding company to such commitments.

The response from Acting Director John Bowman is below:

RESPONSE FROM THE HONORABLE JOHN E. BOWMAN

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Dated: July 6, 2009

Mr. David Baris
Executive Director
American Association of Bank Directors
National Capital Office
Suite P-15
4701 Sangamore Road
Bethesda, MD 20816

Re: Source of Support Agreements
Savings and Loan Holding Companies

Dear Mr. Baris:

Thank you for your letter of February 9, 2009 to former OTS Director John Reich. Your letter provided comments regarding OTS's use of source of support agreements for savings and loan holding companies participating in the U.S. Treasury's Capital Purchase Program. I apologize for the delay in responding.

The OTS has a longstanding practice of requiring savings and loan holding companies to act as a source of support for their subsidiary savings associations. As a source of support, the savings and loan holding company provides the savings association with such managerial assistance and capital as OTS may deem necessary for the institution under applicable regulations and supervisory standards.

The OTS expects that all savings and loan holding companies that participate in the U.S. Treasury's Capital Purchase Program (CCP) to sign a source of support agreement with respect to their subsidiary savings associations. The agency is working with savings and loan holding companies participating in CCP to ensure that the agreements are executed.

I trust that the above information is responsive to your questions.

Sincerely,

John E. Bowman
Acting Director
Office of Thrift Supervision