Police Tame Angry Line Of Bank Clients

Police were called Tuesday to tame an angry crowd of IndyMac Bank customers trying to pull money from their accounts on Day 2 of a federal bank takeover.

At least three police squad cars showed up as tension mounted outside a branch in suburban Encino. Customers were warned against becoming unruly but no arrests were reported

"I've already lost three nights of sleep and three days of eating, now I'm done," customer Joan Rubin said as she sat in a beach chair on the sidewalk, waiting for her turn to empty her account.

"It's a very sad day in America," she said.

Rubin, 52, said she was drawn to IndyMac Bank about 18 months ago by high, well-advertised interest rates and friendly service close to home.

Federal regulators seized IndyMac on Friday. It was reopened Monday under the control of the Federal Deposit Insurance Corp. Deposits to $100,000 are fully insured by the FDIC.

In the 11 business days before the FDIC takeover, frustrated depositors withdrew more than $1.3 billion from IndyMac, reports CBS News correspondent Bill Whitaker.

Worried customers began lining up before dawn Monday outside IndyMac offices in Pasadena and other areas. Makeshift tents were erected outside the Pasadena office after an older woman passed out under the hot sun.

At closing time, FDIC employees took the names of remaining customers in Encino and told them to return on Tuesday.

Customers began lining up at 1:30 a.m. Tensions escalated later, when people on the list got priority over those in line. Five people at a time were allowed to enter the branch.

Customers became infuriated, and police told them to behave or face arrest. Officers stood by at some other branches around Southern California, but there were no reports of problems.

Like all customers with deposits above the federally insured limit, $100,000 dollars, small businessman Don Hinojosa's account was frozen. He was hot.

"I have mortgage payments due, I have car payments due," Hinojosa told CBS News. "How am I going to make those payments?"

Lisa Hester Lerner got in line when she found everything above the insured limit had disappeared from her online account.

"I think it is mass hysteria and similar to the Great Depression," she said.

IndyMac has 33 retail branches, all in Southern California.

Ruben and Rosalie Uranga were also among the hundreds of people who waited in line for hours Monday in Pasadena. Ruben Uranga, a former construction worker, has Parkinson's disease.

The retired couple said they chose to deposit the money they made from selling a home because of IndyMac's advertised high interest rate.

They invested less than $100,000 - an amount that is fully insured - but didn't want to take a chance of leaving it in the failed bank.

"Even if it's the government running the bank now, something could happen. Why take a chance?" Rosalie Uranga said.