IndyMac's Uninsured May Get Coverage

By Adler, Joe | American Banker, June 9, 2010 | Go to article overview

IndyMac's Uninsured May Get Coverage


Adler, Joe, American Banker


Byline: Joe Adler

WASHINGTON - Legislation to retroactively extend deposit insurance coverage of $250,000 per account at all banks that failed in 2008 is gaining ground, and could even be folded into the financial reform bill.

The measure is designed to help depositors of IndyMac Bank recover some of the money they lost when the Pasadena, Calif., thrift failed nearly two years ago.

The California lawmakers behind the bill - Reps. Jane Harman, a Democrat, and David Dreier, a Republican - have won the support of both House Financial Services Committee Chairman Barney Frank and the Federal Deposit Insurance Corp.

"It does provide more even treatment of insured deposits," FDIC Chairman Sheila Bair said in an interview. "There's some justification for it."

The $30 billion-asset company was the first large institution to collapse as a result of the crisis. Its failure, inJuly 2008, came three months before Congress temporarily extended the deposit insurance limit to $250,000 from $100,000 to ease depositor fears. (The higher limit is set to expire at yearend 2013.)

The Harman-Dreier bill, titled the Investor Deposit Yardstick - or InDY Act - would make that increase effective for all banks that were seized by the government after Jan. 1, 2008. In addition to IndyMac, the change would benefit the five other institutions with uninsured deposits that failed before October that year.

As the wave of bank failures has persisted, uninsured customers have routinely been covered by acquirers willing to assume all of a bank's deposits. But in early and mid-2008, when the crisis was just beginning, depositor losses were still somewhat common.

A coalition of former IndyMac customers pushing for coverage of their uninsured claims estimates 8,700 depositors of the failed thrift would benefit from the legislation.

"There were people who deposited money the day before the bank closed, and they were assured that their bank funds were safe," said Lisa Marshall, a flight instructor from Manhattan Beach spearheading the group, called IndyMac Depositors.

"When people sold a home and took all the equity from the home, they said, 'I need somewhere to put this check.' There are people who specifically sold a business and a home ... two weeks before, and then all of a sudden their net loss is $127,000."

Including the five other institutions that failed between January and October 2008 at which depositors took losses -ANB Financial in Bentonville, Ark., Columbian Bank and Trust in Topeka, Kan., First Priority Bank in Bradenton, Fla., Hume Bank in Missouri and Silver State Bank in Henderson, Nev. - the bill would provide an estimated $280 million in additional coverage from the Deposit Insurance Fund.

"The bill is about fairness and affording the same protections to those who suffered losses throughout the financial crisis in 2008, not just late in the year," said Jo Maney, a spokeswoman for Dreier, whose district includes IndyMac branches. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

IndyMac's Uninsured May Get Coverage
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.