Government shuts down the other ailing Mac
On Friday, the Office of Thrift Supervision shut down IndyMac as we know it, and transferred its operations to the Federal Deposit Insurance Corporation.
The mortgage lender was closed after regulators believed that the bank could not meet the demands of its depositors. As of March 31, IndyMac had approximately $19 billion in deposits.
Liquidity concerns have been floating around IndyMac, but the recent release of a letter from Senator Charles Shumer may have prompted depositors and investors to take the concerns more seriously. Sen. Shumer’s letter urged regulators to take actions to prevent IndyMac’s failure. Within the two weeks following the letter’s release, depositors staged a modern day bank run withdrawing $1.3 billion.
IndyMac is the largest regulated thrift to fail and the fifth FDIC-insured failure of the year. The bank will resume “normal” operations on Monday.
Shares of the bank’s holding company, IndyMac Bancorp, closed at $0.28 yesterday.
Tags: FDIC, IndyMac, OTSm bank runRelated Stories
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3 opinions for Government shuts down the other ailing Mac
Shannon Brown
Jul 12, 2008 at 10:46 pm
If it wasn’t for that letter, this probally wouldn’t have happen. I heard that they are going after the guy who had the letter, so he might be facing a lawsuit. Thats crazy how much money was withdrawn i wonder where there money was deposited.
Chris Hayes
Jul 13, 2008 at 3:31 pm
It looks like the recession is affecting every type of business now. $19 billion in deposits is alot of money and I can seem why they shut down operations. I’m sure this won’t be the last FDIC-insured failure of the year as this is the fifth already.
John McMillan
Jul 13, 2008 at 8:20 pm
This appears to be a sign of the times. I’m thinking about buying a house soon. I bet it’s going to be a whole lot more difficult to get approval for a loan!
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