Town Hall LA held its latest “Industry Outlook Briefing” on Wednesday, Oct 28. Shiela Bair, Chairman of the FDIC was the keynote speaker. A group of IndyMac Depositors were in attendance and were allowed to ask questions of the Chairman. E Scott Reckard of the LA Times was also in attendance and published the following story yesterday:
FDIC’s Bair offers no comfort to uninsured IndyMac depositors
The head of the Federal Deposit Insurance Corp. delivered some bad news personally to uninsured depositors who lost money last year when IndyMac Bank crashed and burned, saying an act of Congress is their only hope for recovering their funds.
The FDIC sells failed IndyMac Bank too soon—and for too little. Here is a recent article which effects all of the uninsured depositors Click HERE to read. The FDIC said it could run Indymac for years if necessary. I have news for everyone, the FDIC has no interest in insuring depositors that were lied to by Indymac Bank that exceeded FDIC limits or whose beneficiaries were denied coverage. The FDIC knew what was going on and what banks were telling their customers. They choose to look the other way. They are just as at fault.
Not for us uninsured depositors!!! Please read this latest article appearing in the The Wall Street Journal this morning Click Here to read. Just another fine example on how the Federal Government and the FDIC are looking out for the interests of failed Indymac Bank uninsured depositors.
Click Here to see the FDIC press release anouncing the sale of Indymac bank.
Embedded in this release is an attachment. Pasted below, are the first two bullet points of the attachment. Please see the second bullet.
Fact Sheet: FDIC Sale of IndyMac FSB
• The FDIC, as Conservator for IndyMac FSB (“New IndyMac”), entered into a letter
of intent to sell New IndyMac to IMB HoldCo LLC, a thrift holding company
controlled by IMB Management Holdings LP, a limited partnership, for
approximately $13.9 billion. IMB HoldCo is owned by a consortium of private equity
investors led by Steven T. Mnuchin of Dune Capital Management LP.
• Uninsured depositors will not be receiving an additional claims dividend at this time.
Looks like no refunds for depositors at this time according to this official document release.
Two inherent absurdities flaw the FDIC system. I’ve always found it absurd that innocent depostitors were led to put more than $100,000 in a bank under the “promises” of FDIC insurance. The banks and depositors were encouraged to look the other way and discount the known flaws in this insurance system.
1. In general the insurance is only tentative:
it is not confirmed to be good coverage until after the bank fails.
Would you settle for a year of home fire insurance from an agent who says that if the house burns down during hte year, maybe you have converage for the whole $300,000 value, or maybe you have coverage for only the first $100,000, we will only find out after the house burns down?
That’s how FDIC insurance is provided to depositors.
There is an obvious solution. Under the current inadequate system,
depositors are told by the FDIC to check on line to verify what the FDIC coverage is. Of course that “verification”
is comnpletely non-binding on the FDIC.
Instead, the FDIC should authorize a qualified bank rep to check this when an account is opened it is made and to provide a binding determination of insurance for the account, or to indicate that the funds should be deposited eleswhere. If the website works for the ignorant depositor, then a bank manager should be capable of conclusively figuring it out, and the FDIC insurance should be binding for a clearly specified time period.
(Of course implicit in this is the fact that FDIC coverage needs to be
simplified so that the FDIC can be confident that a trained bank manager can make a proper determination.)
2. Even if your FDIC coverage is good when you make the deposit, the insurance can be lost (that is reduced significantly) by events occurring after the coverage starts).
If you have FDIC coverage based on trusts, beneficiaries and/or joint owners, the death of an individual can cut coverage by 50% or more.
Would we accept fire insurance that gets cut in half just because one of the named residents had the bad form to up and die at the wrong time?
Insurance offered for a term CD should be deternined and considered good for the term of the CD plus a grace period necessary to withdraw or renew, regardless of who dies during that time.
Or sell a term life insurance policy with the CD to pay the lost FDIC coverage. Depositors should not be playing a negative lottery hoping there is no death.
I just came across your blog today and would like to share a story that you may publish. I like so many others here was mislead many times by Indymac Banking officials that all my accounts were fully insured. I called several times and was assured that my accounts were all fully FDIC guaranteed. Even on the Monday after the bank was closed teller 240 reviewed my accounts and I received the same answer that all was in order.
Of course after going through the gut wrenching process of the FDIC interview I found out different. I lost a lot of money due to incorrect bankers information.
I wrote my Congressman, but have never received any answer from him or his staff. I wrote him again after the FDIC changed the rules and was told by FDIC officials that it would NOT include Indymac customers. Had the new rules been made retroactive I would have not lost one dime of money. What an injustice to those of us that trusted the Bank and the government is doling out billions of dollars to save so many other banks. I even called the FDIC to see if they were receiving any of the TARP money but was told no.
Now that it looks like the Bank is going to be sold for 14 billion and you do the math there won’t be enough money to pay the uninsured depositors. They will actually be losing money on the assets as far as I can tell, which will leave nothing for us. When I called the FDIC this morning to run the scenario by one of the agents to see if I was understanding the math right she agreed, but could not comment since nothing had been officially announced. It looks like a fire sale to me for the FDIC to get rid of the Indymac headache. I realize this isn’t the best time in our economic crisis to be selling a bank. It’s just to bad that innocent and careful depositors will probably take it in the shorts on this one. I guess the next few days will tell the story.
If there is anything I can do to help our cause please let me know and I’m very glad to have found your blog. If nothing else I don’t fell so alone in this unjust mess.
IMMINENT FIRE SALE OF INDYMAC BANK MUST BE EXPOSED !!!
The illegal actions of the OTC regulators in May are now compounded by the FDIC desperate efforts to dump IndyMac Bank by year’s end regardless of return or consequences.
PLEASE EXPOSE THIS FDIC SCAM DEVELOPING AT GREAT COST TO THE TAXPAYERS !!!
The scenario is simple:
The OTC allows Indymac Officials to backdate a massive infusion of assets in May , to hide the severity of
their financial condition, deceiving Depositors, Stockholders and the public at large.
If properly informed, the FDIC would have intervened and sold IndyMac Bank sooner, for much more money before assets deteriorated further.
The FDIC takes control of the Bank’s Assets in July when their interests are compromised.
Due to repeatedly documented misinformation of FDIC Insurance Parameters, The FDIC seizes “uninsured”
funds from 10,000 Depositors. The last five months have been a living hell for them…….College Funds vanished, retirement nest eggs decimated, old people penniless….savings of a lifetime disappear.
Shiela Blair spends these five months “altering” mortgages.
The Treasury has doled out over one trillion dollars Charles Schumer’s buddies on Wall Street who made obscene profits from these Loans. Irresponsible Mortgage holders now are “Victims”.
News of the OTC cover-up in May hits the media on December 23rd.
Simultaneously, the FDIC lifts its’ news blackout to announce the sale of IndyMac by year’s end.
December 26th the media uncovers that a desperate FDIC is finalizing negotiations with a private equity firm led by former Goldman Sachs executives ….. Sweet Deal !!!
The scam is simple: The FDIC gets rid of IndyMac
Buyers obtain Bank Charter and get bankrolled for billions under TARP.
Depositors and Stockholders, and ultimately Taxpayers are shafted with MORE debt .
WILL SOMEBODY PLEASE DEFEND THE PUBLIC’S INTERESTS ……????
For further details or documentation please contact directly Lisa Marshall at email@example.com or the undersigned.
Warmest Holiday Wishes,
To all uninsured depositors,
My name is Tracy Li, I am one of the victims of failed bank with deposit receivership. I am also a single working mother originally from China. I worked really hard to save the money, try to build up strong financial foundation. But the nightmare was happened on July 11. I was so sharked and couldn’t eat & sleep well on the following week. when i was in the crowd to withdraw the money on July 14, I was told by FDIC that they possibly to sell Indymac assets up to 5 years. If they can sell the bank, we still don’t know how much we can get it back.
I think we should follow Lisa to fight for ourselves. We cannot just wait…
If you have some actions please count me in.
My name is Jeannie, and I an an IndyMac investor who has not received over 50K of MY investment. I was told all accounts under 100 were insured and had 2 accounts – cd’s in my name of 100k plus a year’s interest/dividends.
Please put me on the list of uninsured folks that you are compiling. I have written my Senator’s Jeff Sessions and Richard Shelby – both expressed their sympathies and basically said that the increased FDIC insurance was not retroactive…. and that was about it. I am livid.
Thank you for spearheading a united effort. I look forward to hearing from you.
October 09, 2008
Mr. Ronald Bieker
Deputy Director, Division of Resolutions and Receiverships
1601 Bryan Street
Dallas, TX 75201
Dear Mr. Bieker,
I am not certain if you are the correct person I should be contacting, if you are not please forward this email to the correct person or department. My wife and I have lost over eighty thousand dollars in the take over of IndyMac bank. We have received 100% of the amount that was federally insured and the 50% dividend that was promised of the uninsured amount. However, we are still out over $80,000.00 at this time. At the time of the take over of IndyMac it was reported that the FDIC intention was to sell the assets of IndyMac to recover any losses of it’s depositors and the FDIC hoped to accomplish this within three months. We are now in the third month and my wife and I are still waiting. We understand these things take time, however the situation my family is in is becoming dire each and every day we wait. Initially my wife and I deposited the money from the sell of our house in IndyMac and this was to be temporary while we searched for another house. Months have passed now and we are having to live with relatives while we wait for something that was taken from us and may never be returned. Mr Bieker if we could go back in time, believe me, my wife and I would have never sold our home and made that deposit into a California bank that a New York Senator caused a run on and left me without a home to provide my wife and my 4 year old daughter. I would like to offer a solution that not only will help my family, but will help the FDIC as well. I have noticed that there are several thousand homes for sell on the IndyMac website and my wife and I would like to purchase one and to have the amount that is due to us discounted from the purchase price. We would be able to pay the difference in cash and this transaction would not require in financing on our part. Please let me know your thoughts on this idea and feel free to contact me with any questions or concerns you may have. I can be reached by mobile phone at 512.538.4243
Bill Jordan and Elvira Rodriguez