BREAKING: Bank Collapses. Feds cite Sen. Chuck Schumer as "immediate cause" of collapse
By Erick Posted in Archived | Banking crisis | Chuck Schumer | FDIC | IndyMac | New York — Comments (14) / Email this page » / Leave a comment »
Federal regulators just seized and shut down IndyMac, a major mortgage specialist.
The Pasadena, Calif., thrift was one of the largest savings and loans in the country with about $32 billion in assets. It now joins an infamous list of collapsed banks, topped by Continental Illinois National Bank and Trust Co., which failed in 1984 with $40 billion of assets.
IndyMac specialized in Alt-A loans, a type of mortgage that can often be offered to borrowers who don't fully document their incomes or assets. The company sold most of the loans it originated but continued to hold some on its books. As defaults piled up, IndyMac's finances deteriorated.
The bank will be run by the Federal Deposit Insurance Corp., a federal regulator, and will reopen Monday.
Now the question is, did Senator Chuck Schumer cause IndyMac's collapse? The Office of Thrift Supervision, that regulates entities like IndyMac, says "the immediate cause" of IndyMac's collapse was Senator Chuck Schumer.
In a written statement, the Office of Thrift Supervision, which regulated IndyMac, said "the immediate cause" of the failure was statements made by Sen. Charles Schumer, a New York Democrat. Mr. Schumer in late June publicly raised concerns about the bank's solvency.
"Although this institution was already in distress, I am troubled by any interference in the regulatory process," said OTS Director John Reich.
This is huge -- that a federal regulatory agency would precisely finger a United States Senator as being responsible for a present financial disaster. And why? Because Schumer demands camera time and soapboxes to keep his power. And this time, he stepped up too high.
Now taxpayers will foot Schumer's bill.