Nervous Depositors Fret Over IndyMac Crash

Hundreds Line Up Before Dawn At California Headquarters Of Failed Bank

(CBS/ AP)  Worried customers with deposits in excess of insured limits flooded IndyMac Bank branches on Monday, demanding to withdraw as much money as they could or get answers about the fate of their funds.

With the failed bank now under federal control, hundreds of people lined up before dawn outside its headquarters branch in Pasadena, reports CBS Evening News correspondent Bill Whitaker.

The Federal Deposit Insurance Corporation took over IndyMac after depositors, worried about its solvency, made a massive run on the bank Friday. IndyMac, which had assets of more than $32 billion -- another victim of the mortgage mess -- flying high in 2006 on risky mortgage loans -- today being run by Uncle Sam.

As the new federal CEO was giving yet another interview, a woman in the long line fainted, Whitaker reports. On loan from FDIC, the new CEO says his biggest job is calming depositors' jitters.

"I just want to reassure people," said John Bovenzi. "Ninety-eight percent of the people who do business with the bank have less than $100,000 in their accounts. They don't have to worry about anything. Their money is completely protected."

The crowd swelled throughout the day, with customers seeking shelter from the hot sun under makeshift tents. Many waited for hours to get inside what became IndyMac Federal Bank after its takeover Friday by the Federal Deposit Insurance Corp.

"I didn't think this could happen," said Charles Tengeri, a retired school teacher who emerged from the bank with a check for $171,000 - an amount he said represented most of his savings.

"I'm glad to get anything out," he said.

Customers had been limited over the weekend to taking out funds through automated teller machines, debit card transactions and checks.

Customer Harvey Soldan spent Sunday night at a hotel near the bank so he could be among the first in line. With more than $100,000 in deposits, he anxiously waited to speak with bank officials.

"It's a question of how much we can get and how soon," Soldan said while waiting in line.

FDIC spokesman David Barr, who was stationed outside IndyMac headquarters, said it could take several years before the agency fully addresses customer claims.

"We have to completely unwind the affairs" of the bank, Barr said. "We may sell a portion to another bank, sell real estate. There may be lawsuits. There are a lot of different aspects to this."

IndyMac is the largest regulated thrift to fail and the second-largest financial institution to close in U.S. history, according to its regulator, the Office of Thrift Supervision.

IndyMac Bancorp Inc., the holding company for IndyMac Bank, had been struggling to raise capital and manage losses from bad mortgage loans.

The banking regulator transferred control of IndyMac to the FDIC because it did not think the lender could meet its depositors' demands amid a run on bank deposits by customers in recent weeks.

The FDIC insures bank deposits of up to $100,000 per depositor and up to $250,000 for funds in retirement accounts such as an IRA.

As of March 31, IndyMac had total deposits of $19.06 billion from some 275,000 deposit accounts. Of those, some 10,000 depositors had funds in excess of the insured limit, for a total of $1 billion in potentially uninsured funds, the FDIC has said.

The FDIC was telling customers with unsecured deposits that they would receive an advance dividend equal to half of the uninsured amount.

The agency plans to cover all insured deposits and then sell IndyMac assets. Customers with deposits that aren't fully insured were told to file a claim with the FDIC so they can try to recover a share of any funds left over from the sale of those assets.

Some customers might also be eligible to recoup dollar-for-dollar beyond the 100,000 limit depending on how their accounts are structured, Barr said.

On Sunday, FDIC Chairman Sheila Bair sought to reassure IndyMac customers, saying customers with uninsured funds could still receive more money after the agency sells IndyMac's assets.

Still, many IndyMac customers who rushed to the bank's offices Monday were nervous about the prospect of losing a large portion of their savings.

"This is my life savings here. I feel really horrible," said James Sherman, an IndyMac customer with more than $100,000 in the bank.

Sherman was hoping to get 50 cents on the dollar above the federally insured limit, with the remainder of his money possibly being applied to his mortgage with IndyMac.

"What do you resort to now, putting money back in the mattress?" he asked.

FDIC officials could not immediately say how many customers had shown up to the bank's 33 branches to withdraw funds. All those offices are located in Southern California.

Tengeri said he was hopeful about getting the remainder of his life savings from the bank.

"I'm keeping my fingers crossed," he said. "I have full trust in the U.S. government. It may take a little time but I'm not worried."

[jydavis1]

smart people will take a high percentage of their bank accounts and put them somewhere else .. real smart people will put some of that money into gold & silver .. don''t believe the tv talking heads - they''re telling you to trust the banks while they are draining their accounts- don''t be fooled ot you will get screwed.

Smart People will properly deposit their money in amounts less than a $100,000 in different insured banks.

Smart people will not buy Gold or Silver as they are already at their highest levels. They may go up some more but they are poised for the fall. If you buy now at the high, then you can only loss. Gold and Silver do not pay interest, and they cost to buy and you are charged a selling cost as well - you would need to make a large profit, to sell without a loss...It''s a suckers play.

[sistatee-2009]

The NEW CEO? Where''s the OLD CEO? Let''s make an educated guess. He took his Gulfstream IV jet to Paris, was driven by limo to his villa in Monico, and is presently sleeping off the jet-lag in a comfortable berth aboard his yacht, at anchor in the harbor, where he will stay a few months planning his next business venture.

[stn_sage]

This is a really ugly situation. The frightening thing is, it could be precursor of things yet to come!

Telling the effected depositors that they''ll get ''x''% back on sale of IndyMac assets, is not particularly encouraging or helpful news!

Good luck, to all caught in this mess!

[wogerwabbit]

Our money being systematically drained dry by corporations like Enron, banks, oil companies, insurance companies and our governments collusion with war profiteers. We are their prey because we have no government protections, only carniverous market forces that are expected to regulate themselves in the midst of their feeding frenzy. This is what we get with Republicans in power... the ruination of our country. We will not forget... you guys are toast in November. Flood these boards with your feeble defenses... it doesn''t matter because we no longer believe anything you say... there are no wolves and never have been... lions and tigers maybe, but none of your proverbial wolves unless they''re you guys in sheeps clothing.

[l8c6]

flying high in 2006 on risky mortgage loans -- today being run by Uncle Sam.

Where is Ronnie Reagan...what''s with this big government on the back of the "free market"

Neo con libertarians, privatizing the profits, socializing the losses one destroyed democracy at a time.

[l8c6]

Gold and Silver do not pay interest, and they cost to buy and you are charged a selling cost as well - you would need to make a large profit, to sell without a loss...It''''s a suckers play.

Posted by KEITHGARDNER

I agree, though gold may reach those incredible highs it seems it''s had so much publicity I would tend to think it''s over sold.

[stn_sage]

various comments
Posted by WogerWabbit at 10:17 PM : Jul 14, 2008
----------------------
My response:

Excellent! Well said.

I hope that many---if not most---of these crooked politicians ARE replaced! It''s a question of whether or not the people are ready to admit the truth to themselves and ACT on it! We''ll see!

[jackobyte]

"carniverous market forces"

Please correct that to:

"parasitic market forces"
or
"parasitoid market forces"

If you cant digg the diff look it up on the internet.


Predators to some extent are to be admired, hence eagles and lions on many world state emblems, whereas no one has the tape worm as an emblem, because thats what these forces have become. We must call a "spade a spade". They must be exterminated with extreme prejudice (as due process of law has/is being taken away by the market forces facilitators: the lawyer-politicians for sale to the highest bidder: reminds me of the fall of Rome).

[vnveteran72]

Just the first signs of a 1929 Economic Crash designed by the Ruling Elite to consolidate their ownership of everything. This time will be much worse. Just watch and see.

[ubrew12]

When Bush cut taxes and Greenspan lowered interest rates, I thought the economy they were ''building'' was a house of cards. But I had no idea it had gotten this inflated. This is getting scary. People are beginning to panic and its like watching a stampede in slow motion.

[lemonskink]

"FOUR MORE YEARS, FOUR MORE YEARS," they chanted. They were mesmerized, terror-stricken, and propagandized into becoming false patriots. They jumped for joy at the Patriot''s Act, they bought lapel pins of the flag by the droves. They looked at those who were skeptical and said, " You''re Un-American." Sad, sad, sad.

[antoniof123]

I wonder how supply side economics is doing still they try to fall on the same tired old ways. In acient Summarira if a king failed to full fill his commentment he was sold into slavery. Maybe we should do the same with our politicians and CEO''s who fail us.

Stop listening to the wing nuts and listen to the middle of the road you will do much better. Glad I didn''t have anything here but all banks are in danger of a bank run like we have never seen before.

[dan3232321]

This wasn''t a case of bad Republicans or bad Democrats. It was a case of BAD BOTH PARTIES. Republicans pandering to large financial institutions to be more and more deregulated and Democrats pandering to the poor and the immigrants. The Democrats pushed and pushed and preached that it is everyone''s RIGHT to own a home. It is the American dream. The truth is that there are simply a great many Americans who don''t have the income, don''t have the drive to maintain a payment schedule and don''t deserve to own a home. At the same time the same hedge funds and speculators who have driven up the price of oil $40/barrel drove the market for subprime loans. POLITICIANS ARE INHERENTLY CORRUPT.

[l8c6]

It is the American dream. The truth is that there are simply a great many Americans who don''''t have the income, don''''t have the drive to maintain a payment schedule and don''''t deserve to own a home. At the same time the same hedge funds and speculators who have driven up the price of oil $40/barrel drove the market for subprime loans. POLITICIANS ARE INHERENTLY CORRUPT.

Posted by dan3232321

It''s all relative to the times buddy. When wealth concentrates in the hands of fewer and fewer the game of Monopoly ends. You''re children if you have any may have your abilities and more but they just might not have the opportunity in the future. My dad prospered due to an economy that made it possible.

[rudy654-2009]

Posted by dan3232321 at 11:51 PM

Oh yeah. Share the blame. LOL! That will make you feel better about those evil immigrants. What a jerk.

[edward1975-2009]

Bad loans and shaky mortgages to people that didn''t qualify. Now it collapses. Bankers trying to make a quick buck, have betrayed their clients who trusted them with their money. Start putting these crooks behind bars immediately and seizing all their assets to pay back their depositors. Maybe others won''t be as quick to decieve when they start losing their life-savings and homes.

[oneworldusa]

I wouldn''t give my money to a place called ''IndyMac'' in the first place.

[wildk55]

good morning america! are we awake? remember september the 11th? the day america changed! what is the real truth? what caused the domino effect with corporate america? why did they fall to their knees? why did the american public loose some or all of their investments? how many military personal does it take to find one person? the real question is "do we want to find him"? how many companies moved out of america to save on labor costs? how many immigrates were allowed in america to join the work force and work for less then minimum wage? why was we lied too about weapons of mass destruction? why do we send billions of dollars overseas to rebuild a country, where that country has no value on life? why was companies with certain ties to very important people incontrol of america, offered the contracts first? why has inflation been on a steady increase since september 11th? yet you blame the american public for not making their mortgage payments and also blame the public for the fall of indymac!

[wildk55]

how many americans are on fixed incomes? how many american families had some type of tragedy that upset their cash flow? how many people injured on the job and now receiving 1/3 or less of their income afford to live? how many people are out of work due to job cut backs? do you know anyone that would rather pay their mortgage payment, before they make sure their family has a hot meal? close your eyes a little bit longer and maybe they will fade away! is that green paper more important, then a family that has been put out on the street? are we so greedy, that we can not keep america in work at a reasonable wage and where they can keep their homes, put food on the table and pay their bills? what happen to the real america and what it stands for? we the people -- for the people

[ahrats]

What about the bank officers? They screw up and walk away scott free? If this was before the FDIC they would probably be hanging from the nearest tree. Bush/Cheny does it again screw the hard working people and let the people in charge walk away without any worries or concerns. Thanks to Democrates & Mr. Roosevelt the FDIC exist.

[underdogus06]

the dollar plumbs new low versus the euro..

[ajaxtheleast]

!! Open Under New Management !!

!!!!!!! THE INDY 500 MAX !!!!!!!!

OVER $100,000 DEPOSIT - -500 BACK

[ajaxtheleast]

The new elitists will be those commenting

on web site boards to flaunt their

internet connection affordability

[whitemale08]

Of course they''re nervous, everybody should be nervous.

Only Larouche''s plan will work:

1. Raise interest rates to at least 4%

2. Pass the HPBA legislation or Home Owners Bank Protection Act. that will stabilize the housing sector which are the collateral for these CDO''s, and MBS.

3. Host an immediate conference with major powers such as China, Russia, India, and U.S. of course to come up with another Bretton-Woods fixed exchange rate system.

4. Bring the Federal Reserve into ''recievership'' and allow Congress to conduct bankruptcy protection against all claims from hedge funds and any other unneccessary claims that keep society functioning.

5. Others explained at larouchepac.com

It''s the only way folks or we are finished as a civilization....and I''m not joking !

[walt1944-2009]

"QUICK, CLOSE THE DOORS! LOOK!!! WE HAVE $2 LEFT!!! QUICK, PUT THEM IN THE VAULT AND MAYBE THEY WILL HAVE BABIES!!!!" - Jimmy Stewart playing George Bailey from IT''S A WONDERFUL LIFE!!!!

So, where is it wonderful???? Maybe China (where the government subsidizes gasoline!), maybe India (though it''s too hot and the Cobras and monkees are dangerous), maybe Europe (where they have free medical care!), maybe Dubai (where Halliburton ran to!).

STOP YOUR WHINNING!!!! IT''S ALL IMAGINERY!!!!

SIG HEIL, BUSH!!!!!
sig heil, ABSOLUTELY MORE OF THE SAME, McCain!!!!

[ianlou]

This wasn''''t a case of bad Republicans or bad Democrats
Posted by dan3232321

*********!
This show will be noted in the History Books as the end results of Bad/Dishonest/Irresponsible/Illegal Republican Leadership in the first decade of the New Millenium.

[fuzzybear9]

Hello America

Fuzzy what shall we discuss today ?

Fast Food is the topic of today,

and I think we''''ll pick Asian Quisene, it is a world economy you know.

Ying and Yang Mac, or we could discuss
Fannie May and Freddie Mac, or we could discuss
or IndyMac and Big Mac.

anyway you choose it, you can roll up to the franchise in you chevy malibue, with no spare tire in back, a sad state for the automakers.

well its all apart of Reganomics I think its called the trickle down effect.

fuzzy where is this going ? is it time to panick yet !

absolutely not,
the time to panick was 20 years ago.

well what can we as Americans do now ?

we need to get that barb wire fence up along the Nevada state line from Mesquite to Truckee so all those bankrupt californians can`t immigrate into the U.S. this needs to be done before the great depression.

there is hope that G.W. will find that 24 billion dollars lost around the pentagon.

well never worry the U.S. mint can print 10 billion dollars a week if needed, so never fear America

sincerely on the market Bear
Fuzzy

[txgrouch2006]

Those depositors are such WHINERS! The bank crash is ALL IN THEIR HEADS! It''s just a MENTAL BANK CRASH!

Nothing is really wrong. Pay no attention to that man behind the curtain! I am the great and all-powerful GRAMM!!!

Hey, Phil. The jerk store called. They said they don''t like you.

[lochlan-2009]

The dollar started moving down on the 8th of July. That''s when the markets started to react to what they knew the Fed would be doing to inflation by bailing out Freddie and Fannie. You can see it across all major currencies, this is a fall in the value of the dollar.

[wardoglrs]

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." - Thomas Jefferson, Letter to Treasury Secretary Albert Gallatin (1802)

When all government, domestic and foreign, in little as in great things, shall be drawn to Washington as the center of all power, it will render powerless the checks provided of one government on another, and will become as venal and oppressive as the government from which we separated - Thomas Jefferson

During times of universal deceit, telling the truth becomes a revolutionary act."
George Orwell


"Paper is poverty,... it is only the ghost of money, and not money itself." Thomas Jefferson to Edward Carrington, 1788