PrintJuly 12, 2008
Feds Blame Schumer for Run on Indymac
This may be a first in the history of the United States Senate. Federal regulators have cited New York Senator Charles Schumer as the proximate cause for the run on mortgage giant Indymac's deposits. That run caused the feds to take over the ailing institution to guarantee its remaining deposits.
It seems that while engaging in his favorite pastime of trying to get his mug on TV and his name in the headlines, Schumer released a letter he wrote to the Office of Thrift Supervision and the FDIC
It seems that while engaging in his favorite pastime of trying to get his mug on TV and his name in the headlines, Schumer released a letter he wrote to the Office of Thrift Supervision and the FDIC
The OTS has determined that the current institution, IndyMac Bank, is unlikely to be able to meet continued depositors' demands in the normal course of business and is therefore in an unsafe and unsound condition. The immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York. The letter expressed concerns about IndyMac's viability. In the following 11 business days, depositors withdrew more than $1.3 billion from their accounts.
"This institution failed today due to a liquidity crisis," OTS Director John Reich said. "Although this institution was already in distress, I am troubled by any interference in the regulatory process."
There was absolutely no reason for Schumer to release the letter except to garner headlines. The publicity hound is going to cost the American taxpayer billions.
Maybe we should take it out of his salary...
