FDIC closes IndyMac Bank

LOS ANGELES » IndyMac Bank's assets were seized by federal regulators yesterday after the mortgage lender succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures.

The former IndyMac Bank locations will reopen Monday as branches of IndyMac Federal Bank.

Hawaii branches will remain open, Federal Deposit Insurance Corp. spokesman Andrew Gray said.

"They will open on Monday for normal business hours," he said. If customers "are under the insured limits, they really don't have anything to worry about."

Deposits are insured up to $100,000 per depositor.

Customers will have continued access to ATM/debit cards and checks.

Other bank services, such as online banking and phone banking, were scheduled to be made available on Monday.

The bank is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history.

The Office of Thrift Supervision said it transferred IndyMac's operations to the FDIC because it did not think the lender could meet its depositors' demands.

"This institution failed today due to a liquidity crisis," OTS Director John Reich said.

The FDIC estimated that its takeover of IndyMac would cost between $4 billion and $8 billion.

Pasadena, Calif.-based IndyMac Bancorp Inc., the holding company for IndyMac Bank, has been struggling to raise capital as the housing slump deepens.

IndyMac had $32.01 billion in assets as of March 31.

FDIC said it closed IndyMac after customers began a run on the lender following the June 26 release of a letter by Sen. Charles Schumer, D-N.Y., urging several bank regulatory agencies that they take steps to prevent IndyMac's collapse.

Some 10,000 depositors had funds in excess of the insured limit, for a total of $1 billion in potentially uninsured funds, the FDIC said.

During a conference call with reporters, FDIC Chairman Sheila C. Bair said the agency would cover all insured deposits and then try to recover its costs by selling IndyMac's assets.