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Review of the Latest News on Indymac's Closure


According to this LA Times article Indymac customers flooded Indymac Bank branches today. Many were reported to have deposits over the FDIC limits. I'm afraid it's too late now for those customers. Perhaps last week's bank run involved mostly customers with deposits over the FDIC limits. In that case, perhaps the blame given to Senator's Schumer's letter by the OTS was too harsh (OTS's press release).

There have been many articles and blog posts focusing on who might be next. This New York Times article and this CNN article review the financials of a few troubled banks. As the CNN article describes, many bank stocks were hit hard today.

Some good reviews of past and present bank failures are provided by Calculated Risk and BestCashCow. From these blog posts, you can see how bad things were in the late 80's and early 90's. The number of failures is still small compared to those times, and it's small even if you compare the total assets. However, with Indymac being the second largest bank to fail (behind Continental Illinois' failure in 1984), the charts are starting to change.

You can review the past 8 years of bank failures at this FDIC web page.

Here are my recent posts on Indymac and its closure:

For those who had over $100K in Indymac, please refer to my post extending FDIC insurance over $100K to see if you may qualify for coverage of over $100K. You may qualify for more than $100K in deposit insurance if your accounts included IRAs, joint accounts and POD accounts. Please refer to the FDIC guide and the FDIC insurance estimator for the official information.

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Anonymous   |     |   Comment #1
I've a CD account with IndyMac with considerable amount of money. I was thinking of withdrawing money from that account, so I called Customer service 10 times this morning; the call did not go through. (I live in East coast). Is there any other way to contact bank?
Anonymous   |     |   Comment #2
I have a account at Alliant credit union .

Are credit unions protected as well as FDIC banks ?
Banking Guy
Banking Guy   |     |   Comment #3
Anonymous #1, you may also want to try the online chat service to contact Indymac. But even that is likely to be busy. Now that the FDIC has taken over, there's no reason to hurry. So you may want to wait for the worries to subside, and it'll be easier to get through.

Anonymous #2, the National Credit Union Administration (NCUA) provides federally insurance to credit unions through the National Credit Union Share Insurance Fund (NCUSIF). It's very similar to the FDIC. Most all credit unions (including Alliant) are NCUA insured. I have more info on this here.
Anonymous   |     |   Comment #4
I opened a Indymac CD for $25,000 in June 2008. Of all the many CD accounts I have spread around in various banking institutions, this is my first experience when a bank collapsed. So, what is the best and painless way to take care of this failure?
Anonymous   |     |   Comment #5
I confess that, with Banking Guy as teacher, I have "recalibrated" my thinking vis a vis the IMB lines. It has to be that many of those folks were in north of the FDIC limits. Also I factor in the Pasadena location. CA is, after all, the "land of fruits and nuts". Only a nut would have kept amounts on deposit at IMB in excess of the FDIC insured amounts. So it's understandable such folks would not realize their money, what's remaining anyway, is now safer than if it were deep within the caverns of Fort Knox. What remains incomprehensible is how people can survive lacking even the most elementary, the most rudimentary, knowledge of how the banking system, and the FDIC, work. Explain that one, Banking Guy!!! [not serious - just kidding :-)]
Anonymous   |     |   Comment #6
6:37 you really don't have any problems at all. Relax. Go swimming. Have a picnic. Catch a fish. Enjoy yourself. Your money is so safe it's amazing. Now if you had said $250000 instead of $25000, well, that MIGHT be a different story! But at $25000 you are strictly in the high alfalfa.

Check back in a week or two, after the dust settles. Decide then what you want to do. You'll probably just remain at IMB with the money, collecting those great rates. Enjoy!