In what could turn out to be the most expensive bank failure ever, troubled mortgage lender IndyMac Bank was taken over by federal regulators on Friday.It appears that CNN Money may not be adjusting for inflation when they call this the "most expensive bank failure ever." If I'm correct on that, then it's misleading reporting.
The operations of the Pasadena, Calif.-based bank - once one of the nation's largest home lenders - were shut down at 3 p.m. by the Office of Thrift Supervision and transferred to the Federal Deposit Insurance Corp.
According to the FDIC, 10,000 IndyMac customers could lose as much as $500 million in uninsured deposits. The agency says the failure will cost the Deposit Insurance Fund between $4 billion and $8 billion, based on preliminary estimates.
"It's possible this will be the most costly bank failure in history, but it's too soon to say," FDIC Chairman Sheila Bair said in a conference call late Friday night. The failure could also affect premiums paid by all banks for deposit insurance, she added.
IndyMac, with assets of $32.01 billion and deposits of $19.06 billion, is the fifth bank to fail this year.
Saturday, July 12, 2008
IndyMac Bancorp collapses. Seized by regulators.
CNN Money reports that federal regulators have just taken over troubled mortgage lender IndyMac Bancorp.