IndyMac Bancorp (IMB) Filling for Chapter 11 Bankruptcy

IndyMac has filled for Chapter 11 Bankruptcy since July 8 and it was seized by federal regulators on July 11, after suffering one of the biggest bank closures in US history, as the troubled US mortgage industry struggles to stem further meltdown. IndyMac's home-equity credit lines were frozen by the Fed on July 13.

The collapse is expected to cost the Federal Deposit Insurance Corporation (FDIC) between $4bn and $8bn, is the biggest banking failure since the American Savings & Loan Association folded in 1988. The only other larger collapse was the Illinois National Bank, which folded with $40bn of assets, in 1984.

Here is a latest news from AP this morning :

IndyMac Customers Want Out

In a scene reminisicent of the Great Depression, frantic bank customers wait in line to pull funds out of an IndyMac branch Tuesday. On Friday, the bank became the second-largest financial institution to close in U.S. history.


The Office of Thrift Supervision shut down the California-based bank after it succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures. Control of its assets were transferred to the Federal Deposit Insurance Corp.


The FDIC insures deposits up to $100,000 per account holder, and retirement accounts up to $250,000. IndyMac customers with accounts exceeding those amounts could begin making appointments to file a claim with the FDIC on Monday. The agency said it would pay unsecured depositors an advance dividend equal to half of the uninsured amount.


FDIC chief operating officer John Bovenzi, second from left, is IndyMac's new chief executive, brought in by the government to manage the failed bank. Reopening the bank on Monday, Bovenzi sought to assure customers and consumers that bank failures have been rare in the past, and that even if more banks do fail, the government has enough in reserve.


FDIC spokesman David Barr, stationed outside IndyMac's headquarters, said it may take several years before the agency completely resolves the thrift's collapse and addresses customer claims. Source: AP

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