IndyMac Bank, the second largest US mortgage company after Countrywide, was seized by federal regulators on Friday. The bank is to reopen today as IndyMac Federal Bank. It will cost the FDIC between $4 billion and $8 billion to recover the assets of the bank's customers, as it guarantees deposits up to $100,000.
Sen. Charles Schumer criticized the Office of Thrift Services for its oversight, "If OTS had done its job as regulator and not let IndyMac's poor and loose lending practices continue, we wouldn't be where we are today. Instead of pointing false fingers of blame, OTS should start doing its job to prevent future IndyMacs."
Two weeks before the bank's collapse, the senator sent letters to bank regulatory agencies recommending they intervene in IndyMac's situation. The release of his letters caused a run on the bank and customers withdrew $1.3 billion, which ultimately pushed the bank to its dead end.