PASADENA, CA – IndyMac customers are lining up at some of the thrift’s 33 retail branches in Southern California to withdraw their hard-earned savings, clearly panicking after the financial institution’s assets were seized late Friday by federal regulators.
IndyMac – formerly the 7th largest savings and loan and the 2nd largest independent mortgage lender in the nation - is now the largest regulated thrift to fail and the 2nd largest financial institution to close in the nation’s history.
The company, based in Pasadena, California and founded by Countrywide nearly two decades ago, began shutting down mortgage lending operations last week. On Friday, the financial institution’s assets were seized by federal regulators and the financial institution was taken over by the Federal Deposit Insurance Corporation (FDIC). That move formed IndyMac Federal Bank, FSB, the conservatorship created by the FDIC to continue to provide banking services in communities served by the former IndyMac Bank, F.S.B.
As far as IndyMac customers are concerned, not much will change. They should simply view the situation as a change in ownership. Loan customers are advised to continue making their payments as usual.
FDIC Chairman Sheila C. Bair said that banking customers have no reason to panic. “The fact is that for insured depositors, IndyMac’s conversion has been largely a non-event,” Bair assured the public. “The more than 200,000 customers of IndyMac with deposits of $18 billion are fully protected. It's important to keep in mind that the small percentage of uninsured are still covered for their insured amounts and half of their uninsured money. As assets of IndyMac are sold, they may receive even more. They have had continued access to their funds through ATMs, debit cards, and writing checks, and it will be business as usual.”
IndyMac reported deposits of $19.06 billion at the end of the first quarter, 2008. The FDIC covers basic insurance limits of $100,000 per depositor with an additional $250,000 for IRAs. Accounts such as annuities and mutual funds are not insured at all. Banking customers who have uninsured deposits can file a claim with the FDIC. The FDIC estimates that the total of uninsured deposits hover around $1 billion and about 10,000 depositors have funds that exceed the basic insurance limit. Bair said that Indymac banking customers who have questions about their deposits may contact the FDIC deposit insurance specialists at 1-877-ASK-FDIC.
“The banking system in this country remains on a solid footing through the guarantees provided by FDIC insurance,” said Bair. “Our industry-funded reserves are strong and our insurance guarantee is backed by the full faith and credit of the United States Government. No bank depositor has ever lost a penny of insured deposits. On this, our 75th anniversary, we will continue that proud tradition."
