I have to echo Larry Kudlow’s question posed yesterday on Chuck Schumer’s involvement of the FDIC takeover of IndyMac Mortgage. Schumer is a senator from New York; IndyMac is based in California.
It is hard to believe, but he caused a run on the bank. Would Senator Schumer have expressed such a lack of confidence in a New York institution? The opportunity was certainly there.
IndyMac is the second-largest financial institution to close in U.S. history, said the Office of Thrift Supervision, which regulates the company.
In comments released to the media, the OTC said a June 26 letter by New York Sen. Charles Schumer expressing concern about the bank’s viability was the ‘immediate cause’ of the thrift’s closure.
Depositors withdrew more than $1.3 billion in the 11 days after Schumer’s letter was made public, the OTC said.
‘Although this institution was already in distress, I am troubled by any interference in the regulatory process,’ OTC director John Reich said in a statement.
What a shame!