Sen. Schumer raises concerns over IndyMac’s solvency
June 27th, 2008, 7:22 am · 7 Comments · posted by Mathew Padilla, Reporter
The Associate Press reported Thursday that Sen. Charles Schumer (D-New York) is concerned about the financial health of IndyMac Bancorp in Pasadena and that an insolvency situation could pose significant financial risks to its borrowers and depositors, and regulators may not be ready to intervene to protect them.
He said a wave of IndyMac depositors withdrawing their funds could leave the lender “in a disastrous financial situation.”
Schumer, who sits on the Senate Banking Committee, fired off letters of concern to the Federal Deposit Insurance Corp.; the Office of Thrift Supervision; the Federal Home Loan Bank of San Francisco; and the Federal Housing Finance Board, which regulates the system of regional home-loan banks.
IndyMac, which has had operations in Irvine, was once the largest player in Alt-A mortgages, which are supposed to be sounder bets than subprime. I profiled their woes in a critical story last year, though I never suggested insolvency could be an issue. But the collapse of the market to sell non-government backed loans to investors has claimed many companies. IndyMac posted a loss of $184.2 million for the first quarter, compared with a profit of $52.4 million, a year earlier.
“I am writing to you out of concern for the safety-and-soundness risks posed by IndyMac,” Schumer told regulators. “The regulatory community may not be prepared to take measures that would help prevent the collapse of IndyMac or minimize the damage should such a failure occur.”
According to the AP, OTS spokesman William Ruberry declined to comment, other than to say that the agency is reviewing Schumer’s concerns. FDIC spokesman Andrew Gray said the agency “does not comment on open and operating institutions.”
As for IndyMac, spokesman Michael DiVirgilio said the company was reviewing Schumer’s letters and had no immediate comment.
Personally, I wonder if Schumer expects regulators to arrange a buyer for IndyMac as the Federal Reserve facilitated the sale of Bear Stearns.
Related news:
- IndyMac expects to lose money for all of 2008
- Downey, WaMu, Indymac plummet in thrift industry rankings
- IndyMac suspends dividend, posts $509 million loss
- Indymac Bancorp cuts 2,403 jobs
- U.S. Senate to air critique of O.C. reverse mortgage company
- IndyMac sees more losses, focuses on liquidity
- How bad are things at WaMu?
- SEC Chairman Cox under fire, report says
- Subprime and punishment
- FBI says SoCal has most mortgage fraud reports
- Foreclosure auction firms accused of “bait and switch”
June 27th, 2008 at 8:20 am
Interesting, my IndMac CD matured just yesterday …
June 27th, 2008 at 12:19 pm
did IndyMac’s CEO take part on Senator’s last fund rasing? I guess NO
June 30th, 2008 at 11:31 am
Maybe the Senator shorted the stock or maybe the Senator is long on the stock and is planning a bail out. I’m hoping for a bail out.
June 30th, 2008 at 3:16 pm
so when is the FDIC coming in to shut them down?
July 1st, 2008 at 8:24 am
I closed my IndyMac account … I’m part of the Schumer Run.
September 21st, 2008 at 9:37 am
Dear Taxpayers, If the truth were told by people like Sen. Dodd, information devulged about the guys that were involved in the Country Wide “Bail-Out Scheme” are the same guys that are involved with Indy MAC. They are the largest contributor to Barrack Obamas campaign fund. Charles Schumer and there misinformation campaign would have you believe that it was Bushs’ fault. This gives a new meaning to the term “Schuuuumered”
MG.