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Did Chucky Schumers Loose Lips Sink Bank?
by mpress | July 14, 2008 at 06:13 am | 256 views | 3 comments | 10 recommendations
by mpress
Chuck Schumer may have caused panic and made a bad situation a disaster.
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. In a statement Friday, Schumer said IndyMac’s failure was due to long-standing practices by the bank, not recent events.
“If OTS had done its job as regulator and not let IndyMac’s poor and loose lending practices continue, we wouldn’t be where we are today,” Schumer said. “Instead of pointing false fingers of blame, OTS should start doing its job to prevent future IndyMacs.”
The FDIC planned to reopen the bank on Monday as IndyMac Federal Bank, FSB. Deposits are insured up to $100,000 per depositor. As of March 31, IndyMac had total deposits of $19.06 billion. Some 10,000 depositors had funds in excess of the insured limit, for a total of $1 billion in potentially uninsured funds, the FDIC said. Yahoo
At a news conference Sunday, the New York Democrat deflected blame cast upon him by regulators for causing a run on the bank that saw depositors withdraw more than $1.3 billion during the 11 days after Schumer released a letter about the possible risks of IndyMac failing.
“The regulator here was asleep at the switch,” Schumer said. “The administration is doing what they always do, blaming the fire on the person who called 9-1-1.”
Schumer noted his letter in late June provided “no new revelations” about IndyMac, and instead pointed out the bank’s problems had been building for years.
On Friday, the Office of Thrift Supervision transferred control of IndyMac to the Federal Deposit Insurance Corp. because it did not think the lender could meet its depositors’ demands. yahoo
July 14, 2008 at 06:13 am by mpress, 256 views, 3 comments
Most RecentMost Recommended Comments (3)
at 08:18 on July 14th, 2008
mpress, I like this story. It's good stuff.
at 10:51 on July 14th, 2008
This is a real case of "blame the messenger" scapegoating. Schumer tries to get regulators to take action, then he's blamed for what happens. Now the govt. is basically running the bank. This is disturbing; we are a capitalist society in which banking and business are supposed to be free enterprise and not controlled by govt. Govt. control of the economy by way of direct control of corporations is one step closer to fascism, a system where private owners are merely puppets of the state. This is dangerous and hopefully, the govt. intervention will be temporary and not a portent of the demise of free enterprise banking. These two companies control 50 percent of the nation's mortgage market... that in itself should not be. Why has there been such market concentration -- is that healthy? No.
at 12:33 on July 14th, 2008
Schumer didn't need a press release to send a message to the bank. Shumer is part of the problem and then he points fingers like the rest of congress who in the 90's relaxed the qualifications for certain people to get loans who would have never qualified in a normal world. But just like the energy crisis congress makes the mess then stands in a corner pointing fingers and investigating oil execs..