Opinion ID: 3009588
Heading Depth: 2
Heading Rank: 4

Heading: The Garden Park Loan

Text: At the same time that Crestmont was negotiating the Levine loan, Seidman and OTS were engaged in a tense dialogue over property owned by Garden Park Associates (Garden Park), for which Seidman was attempting to arrange financing at Crestmont. Seidman had an interest in Garden Park and had also personally guaranteed the development loans for Garden Park. Seidman fully disclosed his interest in Garden Park to the Crestmont Board and Crestmont formally asked OTS to permit it to make the Garden Park loan. On May 23, 1991, OTS denied Crestmont's request citing 12 C.F.R. § 563.43(c)(1) (1991) which forbade certain transactions with affiliated parties.8 Seidman contacted OTS's Chief Examiner in charge of Crestmont, Joseph Donohue (Donohue), for a further explanation of OTS's position. Donohue told Seidman that OTS considered the Garden Park loan impermissible so long as Seidman remained a guarantor of Garden Park's obligation. Seidman asked for reconsideration, but OTS still refused to allow the loan. 8 . OTS amended this regulation subsequent to the ALJ's decision, but the Code of Federal Regulations no longer contains any independent OTS conflict of interest rules. Instead, 12 C.F.R. § 563.43 incorporates the Federal Reserve Board regulations found at 12 C.F.R. § 215 et seq. See 57 Fed. Reg. 45,977 (1992) (codified at 12 C.F.R. § 563.43). There is no provision in the Federal Reserve Board regulations comparable to former 12 C.F.R. § 563.43(c)(1). For the text of former section 563.43(c)(1), see infra typescript at 44.