Search This Blog

Thursday, August 21, 2008

California mulls probing senator over IndyMac crash

It turns out that Senator Charles Schumer (D-NY) released confidential information that caused a run on IndyMac, causing the bank to fail.
WASHINGTON (Reuters) - California's attorney general is reviewing a request by former employees of IndyMac Bancorp Inc to investigate whether a New York senator triggered the bank's collapse by releasing confidential information.

At issue is a much-publicized letter that Chuck Schumer, a Democrat, sent in June to the Federal Deposit Insurance Corp (FDIC) and Office of Thrift Supervision (OTS) questioning the company's ability to survive.

The FDIC took control of IndyMac on July 11 after depositors withdrew more than $1.3 billion over 11 days. It was the third-largest bank failure in U.S. history. At the time, OTS Director John Reich blamed Schumer's letter for causing the run on the bank.

In a letter to Attorney General Jerry Brown last week, 51 former IndyMac workers wrote: "From the day (Schumer's) letter was made public on June 26 until the closure of the bank, a run on the bank took place and the failure became inevitable."

One person's comment following the article cannot be dismissed out of hand:
I am an Independent Voter... I vote roughly 50/50 between the two parties.
This issue tells me that the far-left liberals WANT the economy to fail, WANT banks to fail, WANT the war against terrorism to fail, so they can promote their own agenda. Schumer is among the worst anti-American socialists in politics, right after Boxer, Kennedy, and Obama.
He would rather help a bank fail to make the odds better for Obama than help its depositers succeed. He threw countless bank customers under the bus to forward the Democrat agenda.
He should be impeached for violating long-standing banking laws. The bank regulators by LAW cannot publicize bank audit results beyond the SEC and FDIC filings. Schumer violated the law for his own political agenda.

The fact is that if you publicize the fact that a bank may be over-extended, there will be a run on the bank and it will fail. That’s how Bear-Stearns failed. That’s how IndyMac failed. It so happens that bank failures help the Democrats make their case that the economy is in the tank. So was Schumer helping to make that impression clearer by causing a big California bank to fail? Don’t be too quick to dismiss it and attribute it to paranoia. As someone once said, even paranoids have enemies and Schumer is among the most partisan people in congress.

No comments: