As the FDIC announces the completed sale of IndyMac bank to OneWest Bank, IndyMac’s issues are far from over, said Fran Quittel and Lisa Marshall, group leaders for IndyMac depositors who lost 50% of their funds over $100,000 when the FDIC took over the bank on July 11, 2008 at the behest of the OTS. “It is particularly troublesome since these agencies are documented to have known at least since May 10, 2008 forward that the bank had been allowed by Darrell Dochow, the OTS west region regulator to backdate an $18 million capital infusion and keep IndyMac off the bank watch list, say depositors noting the FDIC took no action to stop the bank from aggressively collecting further deposits, or protect investor cash as it pre-determined removing 50% of their deposits over insured limits on the takeover date. “This legalized larceny is just unbelievable,” group leaders say.
At the same time the FDIC has been busy completing the bank’s sale, vigorously attempting to avoid depositor questions, groups of outraged IndyMac depositors who lost cash in the July 11, 2008 takeover have wasted no time in raising significant issues to Congressional representatives and the media, who have taken an increasing interest in their well-documented story. To date, with over 100 lawsuits filed in Federal Court in Los Angeles there has been increasing significant media coverage documenting an extraordinary number of black hole, questionable transactions on the part of the OTS and FDIC regarding IndyMac.
Due to their non-stop efforts, the grassroots group has gotten the attention of Representative Adam Schiff, who has requested Barney Frank investigate the IndyMac matter, as has the OTS OIG [Office of the Inspector General] which last week forwarded a request on behalf of IndyMac depositors to the FDIC OIG to launch its own investigation of the affair. “Our credibility changed greatly when the OTS itself issued its hard-hitting report condemning OTS behavior on February 26, 2009,” says Fran Quittel of FDIC Business Alert. John Reich, the OTS Director, and Darrell Dochow, the regulator in question have both resigned. “Now it is time for Congress to look a lot more closely at the FDIC, particularly since the IRS has granted Bernie Madoff9s hedge fund investors a lot more favorable tax treatment for their losses than IndyMac’s cash depositors at a bank.
Documentation presented by IndyMac Depositors includes:
1. The letter of December 22, 2008, from Eric Thorson, Inspector General of the Treasury, to Senator Charles Grassley;
2. The letter of January 30, 2009 from John Reich, Director of the OTS, to Treasury Secretary Timothy Geithner;
3. The hard-hitting report filed by the Office of the Treasury’s Inspector General dated February 26, 2009 condemning OTS behavior in IndyMac’s supervision.
All identify actions which could have been undertaken by the OTS and also the FDIC to protect depositors in advance of the July 11, 2008 takeover, which were not done, and also do not provide the transparency sought by depositors to the events surrounding the period from May 10 to July 11, 2008 and from July 11, 2008 forward, particularly where the OTS chief and western region regulator have resigned. “Over and over, we have heard the FDIC tell us that we, not the bank, were responsible for bank provided paperwork which left depositors losing 50% of their cash, although it is clear in many instances that all of the misinformation and documents were provided by bank personnel themselves,” says Lisa Marshall of IndyMac Depositors Group.
What the group has protested overall, in addition to their loss of 50% of their cash deposits, is an established FDIC pattern of stonewalling depositors seeking transparency and clear answers, blaming customers for a rampant pattern of deliberate bank errors and misinformation, with many depositors recently receiving new paperwork for existing IndyMac accounts, sent by IndyMac staff, now FDIC employees, and now bulldozing depositors into a completed sale attempting to end their fight for their lost funds with literally no further explanation.
Therefore IndyMac’s depositors are gathering increased momentum to have Congress take a further look at the matter, providing answers to these unanswered questions:
1.Since the OTS and FDIC knew from at least May 10 forward, why did they allow the bank to continue to aggressively solicit deposits and utterly fail to protect depositor funds or alert depositors, knowing they were not fully insured?
2.Exactly when and how did the FDIC pre-determine its 50% advance dividend? When exactly did they begin to solicit bids for the bank? And from whom? For how long was OneWest in the picture and did their input determine the FDIC’s 50% coverage?
3.Why has the bank, now run by the FDIC since July, sent many depositors new paperwork for existing accounts?
4.In light of Timothy Geithner’s pro-transparency mantra, particularly in light of revealed OTS irregularities, why haven’t Barney Frank, Christopher Dodd, Chuck Grassley and Charles Schumer looked more closely at FDIC operations, particularly since OTS malfeasance has already been revealed?
5.Why are IndyMac’s depositors who lost 50% of their cash treated differently from Bernie Madoff’s hedge fund investors who have been granted extraordinary relief with regard to their losses. In other words, ask IndyMac’s depositors, “Are Bernie Madoff’s hedge fund investors more protected than IndyMac bank depositors who lost cash at a bank supposedly supervised by the OTS and FDIC?”
IndyMac uninsured depositors who lost millions demand justice from FDIC, OTS and OneWest.
[Released on March 19, 2009 - Source FDIC.gov "FDIC Closes Sale of Indymac Federal Bank, Pasadena, California"]