Report: S&L regulators sniffing around Olathe

Housingwire.com reports that the Office of Thrift Supervision has sent examiners to Olathe in order to determine the safety and soundness of Security Savings Bank. The money-losing thrift sought federal bank bailout money last fall, a move at odds with the right-wing political activity of its patriarch, Don Bell.

The examination is a long time in coming. Governance issues emerged in 2004, when the then-president of Security Savings and the board’s audit committee tried to remove Bell from serving as the bank’s chief executive officer. Bell responded by replacing the board, which then fired the executives who had sought his ouster. Olathe Mayor Mike Copeland is the current president of Security Savings.

The Pitch reported in 2005 that Bell’s relationship with Carl Herbster, the politically ambitious pastor of Tri-City Ministries in Independence, caused tension at the savings bank. In 2003, Bell’s development company had bought land from Tri-City before the church borrowed $7 million from Security Savings — a potential conflict of interest.

Change in the board room did not bring financial success. A group of stockholders in Brittany Savings Corp., the savings bank’s parent company, sued last fall, claiming that Bell had misrepresented the health of the business. Bell son’s Frank, the president of Brittany Savings, said the allegations were false.

Bell appears to be on an unlucky streak. The Kansas City Star reported last week that a lender sold hotels he had developed in order to settle his debts.

Housingwire’s sources indicate that Bell’s ties to Republicans kept federal regulators from scrutinizing Security Savings for a time. Bell did not return the author of the story’s calls.