BUSINESS
09/21/2008 05:12 am ET Updated May 25, 2011

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.

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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?