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March 22nd, 2009 by Temple City Tribune
Some banking customers who lost a great deal of money during the falure of IndyMac Bank last year have a new name to lambaste as late Thursday the sale of the thrift was finalized under the new name OneWest Bank.
The Federal Deposit Insurance Corp. said late Thursday it had completed the sale of IndyMac Federal Bank, one of the largest casualties of the housing disaster and rash of bank closures last year. Local officials including Adam Schiff have called for an investigation into the Office of Thrift Supervision for failed oversite of the bank. Despite or perhaps in addition to the culpability of Washington regulators, many in the banking and financial services industry have long seen IndyMac’s heavy investment in an inflated and unpredicable Southern California real estate market as unwise and unwieldy.
The new brand OneWest was formed by an investor group and is to be managed by Terry Laughlin, former Chairman and CEO of Merrill Lynch Bank and Trust is a division of Merrill Lynch, Inc., a brokerage bought by Bank of America at the first of the year after BofA had receieved some $45 billion in TARP bailout dollars.
In a st remnicient of that currently involving black hole insurance monster AIG, though with considerably less media bombast, a judge Wednesday ordered the release of materials related to bonuses paid by bailed-out BofA to Merrill executives just before the January takeover. BofA had been sparring with New York Attorney General Andrew Cuomo as they sought to keep the documents private.
The OneWest group agreed last December to purchase the failed California lender for $13.9 billion after the FDIC had to take over the bank and issue partial refunds of depositors’ accounts up to what was then a $100,000 limit. Just weeks later in October of last year the FDIC announced an increase in its insurance limit on depositor accounts to $250,000, a move befuddling to many local Indymac depositors who have called for retroactive inforcement of the new limit or, in many cases, complete refurbishment of their former balances. The group, IndyMacDepositors.com, blames failed government oversite as well as lack of full disclosure about insurance limits by Indymac workers when issuing new accounts to depositors.
OneWest will assume all deposits of IndyMac’s 33 branches, which will reopen as branches of OneWest on Friday, with deposits continuing to be insured by the FDIC.
Following the Wednesday announcement of the sale’s finalization, an FDIC statement announced that it would issue no more capital repayments to Indymac depositors. Until then, it had been issuing payments of up to 50 cents on the dollar for every one aboce the insurance limit.
As of Jan. 31, IndyMac had total assets of $23.5 billion and total deposits of $6.4 billion, about half the company’s total at the time of its failure. OneWest has agreed to purchase all deposits and about $20.7 billion in assets at a discount of $4.7 billion.
The FDIC will retain the remaining assets for later sale.
By Terry Miller and John Stephens