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July 14, 2008

Economy — IndyMac Taken Over By FDIC 7/14/08

  Nervous customers of IndyMac Bank today lined up at branches in Pasadena and elsewhere, anxious to withdraw their money from the failed institution that was seized by federal regulators last Friday.

With some customers arriving as early as 4 a.m., fueled by coffee and packing lawn chairs and stools in anticipation of a lengthy stay, depositors waited for the bank to reopen at 9 a.m. It has been closed since Friday.

“I called in sick,” said Margie Harbottle, 62, a vocational counselor from Pasadena who arrived around 8:30 a.m. “This is going to take a couple hours.”

To calm customers’ fears, employees of the Federal Deposit Insurance Corp. — the bank’s new manager — made their way down the line, which wrapped twice in front of the building on Lake Avenue and stretched around the corner. They answered questions and explained the bank’s new policies.

“This right now is one of the strongest banks in the country,” said FDIC spokesman David Barr. But he acknowledged customers “just want to get their money — we understand that.”

Yet not all customers would be able to access all of their funds. Customers with $100,000 or less in deposits or with $250,000 or less in a retirement account would have full access to their funds, which are insured by the federal government.

There are, however, an estimated 10,000 IndyMac depositors who had a collective $1 billion over federal insurance limits. In an unusual move, the FDIC said it would give those customers access to 50% of their uninsured deposits. Any additional payments would be made only if the sale of IndyMac assets proved sufficient.

For all depositors, interest rates on most individual accounts would remain unchanged until the accounts mature, the FDIC said. That’s good news for many customers because IndyMac has been paying among the highest rates in the nation for certificates of deposit in recent months. As of last week, the bank was offering an annualized 4.3% on a six-month CD.





  1. I went into the bank April 23, 2008, to make sure my cd rolled over, and asked about the money market accounts, since I knew you could only have one cd per bank. The clerk told me if I added more beneficiaries I could open more cd’s. I did and he setup $295,000 worth of cds for me, in addition to my rollover. I was only able to collect the rollover and told to call to make an appt., with a claims representative and fax a form

    Comment by Dee Ann Welch — July 17, 2008 @ 12:35 am | Reply

  2. That is crazy and scary. I have broken up what little money I have and started accounts at different banks. It is just plain frightening and we have NO other real options.

    Comment by Paulette — July 17, 2008 @ 9:18 am | Reply

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