WaMu wary of IndyMac cashier's checks

More strange doings tonight surrounding the failure and federal takeover of IndyMac: some rival banks are refusing to honor cashier's checks written by IndyMac -- even though those checks are backed by the federal government.

John Bovenzi, the FDIC official now running IndyMac, tells the Los Angeles Times today he is "deeply troubled by reports that there are financial institutions that are refusing to honor or are placing excessive holds on IndyMac Federal checks."

On latimes.com tonight: "Sheryl MacPhee, 46, said she liquidated a certificate of deposit at IndyMac's San Marino branch Tuesday morning after a two-hour wait. She then took the cashier's check to a Washington Mutual branch in South Pasadena to deposit. 

"MacPhee said a WaMu manager told her that under a new corporate policy, the bank was not accepting IndyMac checks. If a customer insisted on depositing the check, it could be eight weeks or more before the full amount would be accessible, she said she was told."

More: "WaMu spokeswoman Olivia Riley declined to discuss details of the bank's check policies. 'We have a check hold policy that takes into consideration a variety of factors,' she said. 'WaMu is accepting checks from IndyMac customers; however, depending on the specifics, funds will be subject to an extended hold period.'  Wells Fargo said it too was placing extended holds on many IndyMac checks as a precaution.

"Officials at the Office of Thrift Supervision, WaMu's chief regulator, are investigating the complaints about the checks, OTS spokesman William Ruberry said." 

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: Bloomberg News
 

Comments

[puckhead]

We need to find out what other banks Sheryl MacPhee does business with and avoid them at all costs. This poor lady should just dig a hole in the backyard and hide her money.

[Slick]

Ummmm.....cash is never on hold i dont know what he is talking about. I work for the damned company lol. NYC

[Candice]

This will sound like an advertisement for the BANKS but I have to say it.

Even in the light of expected possible failures in more Banks in the near future:

"Have faith in the American Banking System and invest in Banks."

Many people have said in the last few days that they trust the hole in their backyards or the safes in their houses to hold on to their money safer than a bank.

First if people start hording money in their homes (if you do, don't even tell relatives because loose money will bring out the criminals), backyards, etc. - for sure banks will fail because they will be lacking funds. Not only are you really not protecting your money, you are contributing to the deflation of the American dollar. Simply if banks fail that it will affect the economy. What you are holding in your backyard, etc. will basically be worthless or near it. Depositing in banks without withdrawing right away will help keep the value of the American dollar up plus it will help banks with their already troubled money flows. Just be sure you spread you money around at different bank institutions and in account(s) under 100,000 each . If one of your banks fails you will be protected if the account(s) are under 100,000. Also you will have your other banks to go to if you need money right away.

[Sarah]

How about the poor IndyMac employees who are being told the same thing about their PAYCHECKS??

[Laker]

Candice,
You are VERY WRONG here.
If you had a CD with Indymac under the insurance limits (<$100K single or $200K joint) you are STILL earning same interest rates that was locked when you open the CD. Even if FDIC will sell Indymac to someone else, you will continue to earn the rate until the CD matures !
Then, they will offer you whatever they want. So it is a big mistake to think that right now, your money is not earning any interest rate.
Additionally, even money market accounts currently pay 3.7%. So indeed, they could change the rate any day on these account since there is no lock, they did reduce my rate from 4% down to 3.7%. However it is still better than anybody else, and it is government money!

[Robert]

Why do people still bank at banks anyways? Credit Unions are not only better offen times offering no fees or at least lower fees, but the customer service is MUCH better. I'm with Bellco and love it.

[Candice]

Laker:

Thanks for the information about the interest. I thought that too until I was inside the Bank and I asked before I took out the money. CDs did not have a penalty for early withdraw and the person helping me was a manager of the former bank. He indicated that interest was stopped on July 11. You basically would have to open a CD at a new interest rate. So unless he did not know what he was talking about I lost some in interest if I had kept the account. For me, its just safer to take what I have and reopen the CDs at different banks with maybe a slightly lower interest rate. In the long run I make a bit less in interest but at least I am making some interest.

[the problemwithcaring]

Ummmm.....cash is never on hold i dont know what he is talking about. I work for the damned company lol. NYC

Posted by: Slick

So do my sisters - who doesn't work for WaMu right now? And good luck with that, seriously.

Anyway, as holding direct deposits, government checks & cash as long as a week or more is pretty much in direct violation of reg cc , I doubt that any policy on what WaMu considers a reasonable amount of time to delay availability will be written down in the policy manual handbook of a customer service agent like you, bootySlicker.

http://www.federalreserve.gov/Pubs/regcc/regcc.htm

[Linske]

All banks are required to comply with Federal Regulation CC "The Expited Funds Avalibility Act" as passed by congress in 1997. This act regulates the length of time a bank can hold a check, look it up and take it with you the next to your bank.

[Gary]

IndyMac, WaMu, Natonal CIty, Downey ... The dominos are
lining up.

[John Keller]

What sort of MORON takes a cashier's check from a failed bank and tries to deposit it at a FAILING bank?

[Mark M]

I have a CD at Indy Federal and I have the same understanding as Laker. The terms of the CD will continue uninterrupted.

[Tombstone Realty]

Actually, WaMu did put a hold on my Stimulus Check, and I could only take $100 out of $600.

Now of course, they had no idea what I deposited, they just held up $500 of the amount. But it said plainly on the receipt that I had x available, and the screen said I had a hold.

About 4 days later, it was all in.

So yeah, WaMu is holding. I don't really care cuz I stuck it in my savings, but they most definitely are holding stuff.

[bigOtis]

hey this is crazy! One Bank who helped to start this whole mess Wamu is won't accept checks from the Federal govt siezed bank??? In about 12 weeks I bet WAMU will have a hard time getting thier checks accepted

[Hawk]

Don't believe everything you read. Wamu was sending the checks out for collections, but changed the policy the next day and is now placing 7 day holds on all the checks. If you are clueless about check holds - they are placed for fraud purposes, not because the bank thinks the FDIC won't honor them.....

[guest]

I've had problems with WAMU accepting checks before. Including checks issued by the State of California. They wanted to put an excessive hold on it and send it for collections.

I took my business elsewhere.

[DAWK]

as a retired designer jeweler, i dealt in gold platinum daily,using these metals as investment and for creating jewelry pieces for my shop.
Heres some advice,that might work,if you can keep your mouth shut: go to a local profesional safe / locksmith,that sells 'TL30' floor safes,like ''star' brand ,mosler-american safe etc.or what ever is current-the best. shop around several safe stores,and DO NOT...buy a safe from wal mart-sears,or stores that do NOT sell professional safes.
most folks hava a cement floor,either in their garage or home-patio etc. so doing this ,on your own,the instalation of your safe is paramount; because you-alone and your partner for life must dig this hole in the concrete floor,and instal-mix cement,with re-bar,then place the very heavy floor safes into the ground,below the floor level. I recomend THREE floor safes, in variouus sizes,some for larger goods,some for smaller goods, installed around your home and garage,if you can see the reasoning. this also improoves the value of your home . by placing your cash-jewels-gold-platinum-silver coins in ONE of three safes, , in the floor,well concealed,you have greater.... 'odds' of a burgler being (professionaly) prepared to crack this system of "THREE FLOOR SAFES"!! the idea here,is to 'rotate the goods(or divide up in each safe-equally) in all three safes,so the valuables will be given a 'three to one' odds of the safe/safes being succesfully broken into,by a professional safe cracker,let-alone an ameature !!
also; wire up these safes with a sensitive-vibration alarm system wired into a local alarm outfit,but do not tell them about your safe-systems!
the bank where you place monies,is now out of your secure system,but you can still keep enough on deposit,for regular busines,and afford the loss if any,when they go broke and the 'fdic' doesn't pay you ,because of a flood of failing banks problem.
essentualy YOU...are now a private bank,and secrecy is the main approach,as that would be your weaknes,so DO NOT...brag about it,just,keep it to your self,untill all this mess clears up,and you will always have peace of mind.
I should know,because two of my best friends were safe experts,and I installed this system in my jewelry store (for 20 years) and never got 'HIT" because safe crackers hate this system,as it is a guessing game ,trying to find the EXACT...safe with the valueables,since it's a 'three to one shot'.
if you are noot 'handy' then find a safe expert that is 'boonded' and use them,as these safe professionals are more trustworthy than any bank manager you could find!

[Brain]

The reason WaMu is holding funds is because they may very well be the NEXT IndyMac. This is no joke. Do yourself a big favor, and get your money out of WaMu.

They're going down - and soon... unless of course, the ever generous Feds volunteer the US taxpayer to bail their asses out; but don't count on it.

[Hordac the Refuser]

What yuo guys are describing with excessive holds reminds of what Bank Of America has *ALWAYS* done. It didn't take me long to stay away BoA.

I have a credit union now - that's where it's at. Find yourself a credit uniun that only allows reputable people to be members, and bank there.

After 20 years at SACU, I only once had a problem cashing a small payroll check for $2G with a new teller. She said "I'm not sure I..." and I said "well I've been banking here for iover a decade", she typed something, and it was "here's your cash, Mr. Hordac."

I remember they called me once because I dropped a check on the lobby floor without noticing. Security must have found it. They cashed it and put in my account over the phone.

[Allen]

I don't understand. Oil is down more every day, Fannie and Freddie are still operating. The stock market is on its way back up, but all I see is doom and gloom. Are the banks failing at a record pace? I'm still getting tons of credit offers from WAMU, HSBC, Capital One. What Gives?

[Roland]

Candice says don't keep cash at home because you contribute to deflation. But if deflation is coming then cash will be king and keeping it at home will be the smart thing to do. Drawing down my CkgAcct now.

[mike]

I can't believe how many misinformed people there are in this World. All of you are simply sensationalists with absolutely no clue. Wamu has a thriving retail bank and huge credit card base that will more than offset their losses in due time. Many of you just need to calm down, Jesus.

[Jigstrom Lange]

The reason they are holding these checks for 8 weeks is because they are out of their own cash, and are probaby in the early stages of their own bank run.

To me , it is outright fraud what they are doing. Get your money out of Wamu, sooner rather than latter.

[Sean]

Some people never learn. They are lucky enough to get their money out of one bankrupt institution, and they immediately put it in another.

[Way up North]

Scary stuff going on down there in the States. Just hope it doesn't suck in the Canadian banking system. And to the posters who mentioned Credit Unions, I say right on. I never knew what it was liked to be treated as a person (rather than a number) until I acquainted myself with a Credit Union.