FDIC Assumes Control Of IndyMac, Doors Remain Open

The new CEO of IndyMac Bancorp, which was taken over by the Federal Deposit Insurance Corp. (FDIC) on July 11, has urged consumers to keep their faith in the troubled lender.

John Bovenzi, the chief operating officer of the FDIC, has been appointed as IndyMac's new chief executive. In an interview with CNN, Bovenzi stressed that IndyMac was still operating and is not on a fast track to oblivion.

‘I think the important point to make is that, historically, only a very small percentage of the banks on our problem-banks list ever failed,’ said Bovenzi. ‘While there are 90 banks on the list, there would be no expectation that 90 of those banks would fail.’

According to the Associated Press, IndyMac is the second largest U.S. financial institution to fail. The Office of Thrift Supervision, IndyMac's federal regulator, transferred control of the troubled institution to the FDIC last Friday.

The bank's failure followed a rush by depositors to withdraw their funds from their accounts. Since June, when concerns about the bank's financial health were publicly raised by Sen. Charles Schumer, D-N.Y., $1.3 billion in deposits were withdrawn from IndyMac.

The FDIC's control of IndyMac will be temporary, as the agency has announced plans to return the bank to the private sector within the next 90 days.

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