Wednesday, August 13, 2008

FDIC: Fewer Uninsured Deposits at IndyMac

by Bill McBride on 8/13/2008 12:35:00 AM

From the Money & Co. blog at the LA Times: FDIC slashes estimate of IndyMac's uninsured deposits

John Bovenzi, who was named to head the Pasadena bank when the Federal Deposit Insurance Corp. took control of it July 11, said in a memo to the staff today that "it now appears that there were about $600 million in uninsured deposits" when the government seized the lender.

That’s 40% less than the FDIC’s original $1-billion estimate.

An FDIC spokesman said the reduced figure stemmed from the agency’s work since July 11 to identify jointly held accounts, trust accounts and other ways that customers had structured their deposits to stay within FDIC insurance limits.
Joint accounts are a common way to get around the FDIC insured limit. I'll have some more comments on this, but I think the FDIC will find this is common with failed banks, since the banks actively marketed this method of having more FDIC insurance.

There are a few other items in the story.