A bit more editorialized than I prefer, but let's be honest. This is a sad and pathetic showing. But hey, the past eight years, all federal things have been sad and pathetic showings.On Day 3 of the financial hostage drama otherwise known as IndyMac Federal, someone needs to say it: The government's takeover of IndyMac has been a stunning display of cluelessness and incompetence and has given bank customers every reason to feel anxious and angry.
If there is financial unease and anxiousness in America today, it is partly the FDIC's fault.
For the third day in a row, the federal government this morning appeared unprepared to deal with bank customers who simply want their money. Frazzled, anxious and angry Californians -- many of them elderly -- are waiting on blazing sidewalks for the third day in a row, while security guards block the doors to the bank's branches. An elderly woman fainted while waiting in line in Pasadena. Depositors were threatened with arrest yesterday in Encino. This is how the government treats its customers?
In exactly which manual of customer service does it say the following: When your customers arrive at your place of business, do not open the doors and invite them inside. Instead, guard the doors and tell your customers to wait for hours in the sweltering heat outside. If they grow restless, threaten them with arrest.
I'm not suggesting the government cover uninsured deposits. I'm suggesting it treat its customers with respect.
This is more than a matter of inept customer service. Images of anxious depositors unable to get access to their money are powerful, and scary; they cause even more financial anxiety. The FDIC is responsible for those images, and that anxiety, because the FDIC is keeping these people waiting in line. In Santa Monica this morning, about 15 people, many of them elderly, were waiting on the sidewalk outside an IndyMac branch. I asked a security guard why he couldn't just invite them inside the bank. He said the bank's air conditioning system could not handle the crowd. I suggest the FDIC dip into its $50-billion fund, drive over to Home Depot, and buy some fans.
I know of children in Los Angeles who run lemonade stands that have better business sense than the FDIC has displayed this week.
The FDIC has 4,500 employees. It needs to put a few hundred of them on airplanes today to come to California and run this bank. Invite the customers inside, turn up the air conditioning and keep the branches open around the clock until there are no more lines. That's right, invite your customers in off the street. Pretend for a moment that you care about them.
Do not tell them to go to your website. Do not tell them, as the president did yesterday, to "take a deep breath." They are not behaving irrationally. Theirs is a rational response to government incompetence. It's their money and they want it. Greet them politely, ask them what they want, and give it to them.
And of course, because we need to remind people there were, you know, laws about this stuff...
AP: Feds probe IndyMac for fraud.
Imagine what could have been if the bozos had been enforcing laws and regulations to begin with. Heck, imagine what would have been if conservatives hadn't gutted all financial regulations.NEW YORK (Associated Press) - The FBI is investigating failed bank IndyMac Bancorp Inc. for possible fraud, an official said Wednesday of the government's latest target following the collapse of the nation's subprime mortgage market.
It was not immediately clear how long the FBI's probe of the bank has been ongoing _ or whether it was opened before last Friday's takeover of IndyMac by the Federal Deposit Insurance Corp.
The investigation appears to be is focused on the company and not individuals who ran it, a law enforcement official told The Associated Press. The official spoke on the condition of anonymity because he was not authorized to speak publicly about the investigation.
IndyMac Bank's assets were seized by federal regulators after the mortgage lender succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures.
The bank is the largest regulated thrift to fail in the last 20 years, regulators said.
Across the country, reports of mortgage fraud have soared over the past year as the subprime mortgage market collapsed, and defaults and foreclosures soared.
IndyMac's operations were transferred to the FDIC because bank regulators did not think the lender could meet its depositors' demands. The FDIC is now running the bank under the name IndyMac Federal Bank, FSB.
FDIC spokesman David Barr declined comment Wednesday.
It's unclear what penalties IndyMac could face now that it has been taken over by the FDIC. Generally, companies guilty of illegal activity can face civil charges and be forced to pay sanctions. In some cases, investigations that uncover new information can lead to focusing on new targets _ like individuals. But it's unknown whether the FBI's case against IndyMac will do so, or how it could pursue charges against a now-defunct corporation.
Shortly after the FDIC took over operations, Barr said most depositors were given immediate access to up to $100,000 in their accounts and 50 percent of any money beyond that threshold. Depositors with joint accounts or retirement accounts could immediately withdraw greater sums.
Depositors were given receivership certificates for any money they couldn't immediately withdraw and may be able to receive some of that money after the bank's assets are sold off.
Early this week, hundreds of worried IndyMac customers lined up out of the bank's headquarters branch in Pasadena, Calif., demanding to withdraw as much money as they could or get answers about the fate of their funds.
Over the last year, and faced with a cratering housing market, the FBI has opened a wide-ranging probe of companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors.
Countrywide Financial Corp., formerly the nation's largest mortgage lender and now owned by Bank of America Corp., is also under scrutiny.
Additionally, two former Bear Stearns managers were indicted last month on conspiracy and securities and wire fraud charges alleging they lied to investors in a hedge fund that tanked last year as the subprime market collapsed. Those charges marked the first criminal charges to arise on Wall Street from the subprime mortgage debacle.
In all, the FBI is now investigating 21 companies tied to the subprime mortgage crisis, up from 19 last month. Authorities are looking into at least 1,400 mortgage fraud cases nationwide, and more than 400 real estate industry players have been indicted since March.
FBI Director Robert Mueller has said the investigations focus on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments. Losses to homeowners and other borrowers are estimated at over $1 billion.