Jul 11, 2008 11:49 pm US/Pacific
Feds Shut Down Pasadena-Based IndyMac
LOS ANGELES (AP) ―
-
-
Federal banking regulators shut down troubled Pasadena-
based mortgage lender IndyMac Friday. The bank is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history, regulators said.
AP
IndyMac Bank's assets were seized by federal regulators on Friday after succumbing to the pressures of tighter credit, tumbling home prices and rising foreclosures.
The Office of Thrift Supervision said it transferred IndyMac's operations to the Federal Deposit Insurance Corporation because it did not think the lender could meet its depositors' demands.
IndyMac customers with funds in the bank were limited to taking out money via automated teller machines over the weekend, debit card transactions or checks, regulators said.
Other bank services, such as online banking and phone banking were scheduled to be made available on Monday.
The bank is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history, regulators said.
"This institution failed today due to a liquidity crisis," OTS Director John Reich said.
IndyMac had $32.01 billion in assets as of March 31.
Pasadena, Calif.-based IndyMac Bancorp Inc., the holding company for IndyMac Bank, has been struggling to raise capital as the housing slump deepens.
A spokesman for the lender did not immediately return an e-mail request for comment.
The banking regulator said it closed IndyMac after customers began a run on the lender following the June 26 release of a letter by Sen. Charles Schumer, D-N.Y., urging several bank regulatory agencies that they take steps to prevent IndyMac's collapse.
In the 11 days that followed the letter's release, depositors took out more than $1.3 billion, regulators said.
The FDIC planned to reopen the bank on Monday as IndyMac Federal Bank, FSB.
(© 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
CBS News Interactive: Eye On The Economy
Click to enlarge
Stumble It!
Comments