Schumer on IndyMac's failure: Stop blaming me!

Sen. Chuck Schumer today went on another counterattack against federal banking regulators who’ve blamed him for helping cause the failure of IndyMac Bank.

At a news conference, the New York Democrat repeated his contention that the bank’s regulator had been "asleep at the switch." He said his public questioning of IndyMac’s financial health in late June merely stated the obvious.

"The administration is doing what they always do, blaming the fire on the person who called 911," Schumer said, according to the Associated Press’ story from the news conference in New York.

Pasadena-based IndyMac, with $32 billion in assets, was seized by the government Friday. The loss-ridden mortgage lender had faced an outflow of deposits since Schumer on June 26 made public a letter he sent to the Office of Thrift Supervision and the Federal Deposit Insurance Corp., saying he was "concerned that IndyMac's financial deterioration poses significant risks to both taxpayers and borrowers."

Schumer’s decision to go public with those comments ignited a firestorm in Washington. Regulators on July 2 said he was contributing to "rumors and innuendo" about the bank that could hasten its demise.

On Friday, regulators specifically fingered Schumer for IndyMac’s failure. The Office of Thrift Supervision said in its statement announcing the seizure that "the immediate cause of the closing was a deposit run that began and continued" after Schumer went public with his concerns.

"This institution failed due to a liquidity crisis," OTS Director John Reich said Friday. "Although this institution was already in distress, I am troubled by any interference in the regulatory process," a reference to Schumer.

The FDIC estimates that IndyMac’s failure will cost the agency between $4 billion and $8 billion as it unloads bad loans and makes insured depositors whole.

Schumer today said his June 26 letter contained "no new revelations" about IndyMac. He repeated much of his previous defense of his decision to go public about the bank’s ills, including his assertion that the OTS was "a weak regulator" and that "my job was to try and toughen them up, and that's what I tried to do."

Photo: Sen. Charles E. Schumer by Mark Wilson/Getty Images

Comments

[debbie]

Wake up people. Haven't you heard? It does not matter what a democrat does. You are supposed to say, "Bush did it" instead. Isn't that what democrats have been saying for the past 8 years. The most amazing thing is happening in some of these comments. The article is about Chuck Schumer, a democrat, but habitually without thinking they so quickly write, Bush did it. That's the same thing as thinking a ball is square, because somebody told them it was. You're starting to bore me.

[Judy]

Investigate and impeach these DEMOCRATS!

[Erik]

He really Chucked it up! He yelled "fire" in a theater. The SEC should go after him on abuse of insider information.

[yadayada]

schumer was slammed by more than just a few "neocons" i the blogosphere people in congress, senate, current and former OTS execs, etc. all a go at him before the huge financial meltdown he and dodd, and franks, et al helped create. http://latimesblogs.latimes.com/money_co/2008/07/sen-charles-e-s.html
what he did was intentional. it may have been for monetary gain (his or some cronies) but I believe it helped begin the collapse of the whole market. indymac bank was criticized by schumer for having a ton of bad mortgage paper. this caused a run on indymac resulting in it's collapse. hundreds (and then thousands) of people throughout the entire financial market began looking at how their own holdings were inextricably chained to mortgage securities. they saw and realized how congress had forced, by federal mandate, fannie mae and freddie mac to buy, shuffle, repackage, sell, and trade the bad paper as good securities. more runs, more collapse.
whoosh---big economy crisis, then "it's all bush's fault. we need change."
hope you like your change.

[Randall]

You people that keep saying that Chuck was just telling the truth, doing the right thing:

You cannot possibly think that publicly announcing that IndyMac was in a hairy situation was the best way to solve that problem. There are a myriad of other ways the problem could have been solved, most of which would prevent the economy from receding into a devastating downward spiral. Chuck is either a criminal and should be investigated and prosecuted to the fullest extent of the law, or he is literally dumber than a box of potatoes. But then again, "Ignorantia juris non excusat," Ignorance of the law is not an excuse...

[Lisa]

Check out our site on this.... www.indymacdepositors.com

[freddy]

William R. Bauer-

You sir are a moron.

Schumer's public statement was an assurance of the bank's failure but was but the last straw in the Democrat plan to take over the banking industry.

It all started with Fannie/Freddie where the Dems strong armed banks in outrageously dangerously lending to minorities mostly who they knew could NEVER afford to pay them back....

WAKE UP...