IndyMac detailed; NCUA notes soundness of CUs

July 15, 2008 – The conversion of IndyMac Bankcorp to the new IndyMac Federal Bank, FSB, has been “largely a non-event” for the institution’s customers, FDIC Chairman Sheila Bair said Sunday.

“The more than 200,000 customers of IndyMac with deposits of $18 billion are fully protected,” she said. The small percentage of uninsured depositors still have coverage of their insured amounts and half of their uninsured money, she added, and they may receive even more as IndyMac assets are sold.

Bair said IndyMac is just one of 8,494 depository institutions and represents just 0.2 percent of banking industry assets.

The Pasadena, Calif.-based IndyMac was taken into conservatorship late last week amid a worsening run on deposits. The Office of Thrift Supervision, in its statement on this event, said the deposit run “began and continued” after Sen. Charles Schumer, D-N.Y., released a June 26 letter to the OTS and FDIC, stated OTS Director John Reich.

The institution had been facing pressures emanating from the faltering mortgage market since last summer and was deemed troubled based on an OTS exam that began this January.

FDIC has estimated the cost of the resolution of IndyMac at somewhere between $4 billion and $8 billion.

On Monday, NCUA released a general statement attesting to the safety and soundness of credit unions insured by the National Credit Union Share Insurance Fund. The fund closed with an equity ratio of 1.24 percent in June and is expected to close the year at 1.28 percent, the agency said. A mid-year report on the fund is slated for the board’s July 24 open meeting.

“While there are isolated incidences of credit unions encountering difficulties, on the whole the credit union industry is healthy, stated NCUA Chairman JoAnn Johnson. “The NCUSIF enters the second half of 2008 secure and well-capitalized.”

NCUA provides an overview of NCUSIF coverage on its Web site along with an online share insurance estimator tool. NAFCU also offers a statement insert, “Your Federal Share Insurance,” that credit unions can use to educate members about their insured shares.