California May Probe Senator Schumer Over IndyMac Collapse

WASHINGTON (Reuters) - California's attorney general is reviewing a request by former employees of IndyMac Bancorp Inc to investigate whether a New York senator triggered the bank's collapse by releasing confidential information.

At issue is a much-publicized letter that Chuck Schumer, a Democrat, sent in June to the Federal Deposit Insurance Corp (FDIC) and Office of Thrift Supervision (OTS) questioning the company's ability to survive.

The FDIC took control of IndyMac on July 11 after depositors withdrew more than $1.3 billion over 11 days. It was the third-largest bank failure in U.S. history. At the time, OTS Director John Reich blamed Schumer's letter for causing the run on the bank.

Read the full story here

A look back at the IndyMac crash:

::IndyMac Customers Line Up To Transfer Money To Mattresses
::Schumer Says It Wasn't His Fault
::Implode-O-Meter Exists -- Scary, Right?

Comments

[TruEngineHearing]

The woman who fronts this effort in TV interviews is down about a quart in believability. She's just hauling a bad idea up a pole to excite a bunch a righties. My money says she's probably another of Cindy McCain's secret sisters - this one skulking through the desert at night, trying to sneek up and carve off a nice piece of money from the uber blonde and her famous prisoner.

Golly, sign me up - I can't wait to go through this crap for eight years.

[craneman]

That's right everyone, Just shoot the messenger.

[JBS]

"It certainly raises eyebrows that the firm promoting this letter is the same outfit that fueled the Swift Boat attacks and does work for the RNC," said Schumer spokesman Brian Fallon.

Does seem a little strange. Gotta wonder who's paying the bills and who expects to profit from swift boating Schumer?

[DRaymond]

Schumer didn't write that letter unsolicited. He wrote it because IncyMac asked him to. What he didn't do was keep it secret like McCain and the Keating Five did. Which is no doubt exactly why he didn't keep it secret.

[Novista]

If it weren't for a Schumer letter, no one would ever have known about the $51.1 billion bailout from FHLB to Countrywide (the daddy of IndyMac) even as Mozilo was being investigated by the S.E.C. Whatever happened with that?

[ajax2]

Follow the money, Schumer may have been in the shorts.

[Gasparilla]

I guess Schumer caused all those savings and loans to go under during the Reagan years. Which the taxpayers had to bail out at half a trillion. Including a billion or so for Neil Bush's Silverado. Please.

[Bettysdad]

Conversely, McDonalds is so successful because food critics praise it.

[TrooAmerican]

ya know... using that argument, anyone that ever reported anything having to do with a banks poorly run business practices is now liable for that banks later failure! So every media, regulatory, wealthy financier, wallstreet person thats ever mentioned anything before a banks failure is to blame.

That'll learn em! Next time you see trouble Mr. Schumer, you just dont tell anyone official-like about it.

[Chubbster]

Oh yeah right...without Schumer this would never have been a problem. The CA AG is obviously a genius.

[CaptainHowdy]

No, but you are.

[Chubbster]

No doubt about it.

[TrooAmerican]

So now they are trying to Blame the messenger for the collapse of a bank that was near collapse from its fraudulent and poorly run business practices?
nice.

[kassandrasduplex]

And of course the Feds are credible now after the politicization of the Dept. of Justice?

[LeeCalif]

Oh, pleeeeeeeeeeeeeeeeeezzzzzzzzzzzzzzzzz !

Schumer is not the problem.

Deregulation is the problem.

Deregulate = takes away the regulations.

[rollingdivision]

Schumer did play a very large role in the run on the bank which resulted in the failure.

[Podewumun]

Get real, rd. Did Schumer send a letter to each and every depositor? No.

[EinChicago]

Ummm. Yes. He pretty much did. By sending the letter to the MSM rather than just to the OTS, he pretty much did EXACTLY that.

[funkalicious]

Perhaps if Schumer had been doing his job crafting legislation to stop the liar and Ninja loans, advocating for the common worker instead of advocating on behalf of his investment banking.

Setting up a failed bank and their investors to take the fall while tipping off the wall street naked short sellers. I am in no way defending Indy Mac and their horrid lending practices but guys like Schumer entrusted by the public to regulate failed in their mission. The Senate needs a new broom.

Old Chuckie wouldn't be in the old Bologna Pickle brine he finds himself in today.