IndyMac Bank Failure
On July 11, 2008, nervous investors withdrawing money from the California-based IndyMac bank forced the FDIC to seize control of the institution.1
A major mortgage holder caught in the real estate bust that began in 2007, IndyMac's decline may have been hastened by the publication of a letter written by New York Senator Charles Schumer on June 26 expressing concern over the bank's stability.2
Fast Facts
- Accounts, ATMs, debit cards still functional
- Helpline for customers: 1-866-806-5919
- 5th U.S. bank failure of 2008
- IndyMac lost $184.2 million in first quarter of 20082
- IndyMac called an "aggressive lender" by Jim Cramer3
- FDIC estimates a cost of $4 million to $8 million for the takeover4
- Second largest bank failure in U.S. history4
- Situation called a "true run on the bank" by Jim Cramer3
- Investors had withdrawn $1.3bn in 11 days prior to takeover5
- Rush to withdraw followed a letter from Senator Charles Schumer4
- Schumer's letter asked regulators to begin taking step to takeover IndyMac4
- Will reopen as IndyMac Federal Bank1
- Will be supervised by the FDIC1
Schumer Letter
Schumer's letter, addressed to federal regulators, warned that the ailing bank could fail if faced with a wave of withdrawals by account-holders.6 IndyMac officials blamed the letter for causing the very situation it had predicted. Between June 27 and July 10, cautious IndyMac customers withdraw a total $1.3 billion.2
Related Pages on Mahalo
FDIC Bank Watch List | Charles Schumer | Fannie And Freddie Bailout | Fannie Mae | Freddie Mac | Mortgages | Subprime Mortgage Crisis | Bear Stearns | Lehman Brothers
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