Second Largest Bank Failure in U.S. History: Feds Seize IndyMac
It’s no longer a rumor; it’s now news. IndyMac (IMB) has failed.
From Reuters:
The FDIC said the estimated cost of the California-based bank’s failure to its insurance fund is between $4 billion and $8 billion. The regulator said it will operate IndyMac to maximize the value of the firm for future sale.
IndyMac’s primary regulator, the Office of Thrift Supervision, blamed a senior lawmaker’s comments for causing a run on the deposits at the largest independent publicly traded U.S. mortgage lender.
From Bloomberg:
IndyMac came under fire last month from U.S. Senator Charles Schumer, who said lax lending standards and deposits purchased from third parties left it on the brink of failure. In the 11 business days after Schumer explained his concerns in a June 26 letter, depositors withdrew more than $1.3 billion, the OTS said.
“This institution failed due to a liquidity crisis,” OTS Director John Reich said in the statement. “Although this institution was already in distress, I am troubled by any interference in the regulatory process.”
Office of Thrift Supervision Shuts Down IndyMac (AP)
IndyMac Seized (Bloomberg)
IndyMac Taken Over By Regulators (Reuters)
Federal Regulators Take Control of IndyMac (LA Times)
IndyMac Bancorp Is Seized By Federal Regulators (WSJ PREVIEW)