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Dreier, Harman Introduce InDY Act
Bill Will Retroactively Bring Fairness to Former IndyMac Depositors
WASHINGTON, DC – Congressman David Dreier (R- CA) joined Congresswoman Jane Harman (D-CA) today to introduce legislation aimed at helping families and small businesses that were IndyMac depositors recover $233 million in lost savings. The Investor Deposit Yardstick (InDY) Act, H.R. 5429, would retroactively apply the Federal Deposit Insurance Corporation (FDIC) deposit insurance amount of $250,000 to institutions that failed prior to October 2008 when the amount was increased from $100,000 to $250,000.
“Seeking fairness for former IndyMac depositors has been a priority since the bank’s takeover in the summer of 2008,” Dreier said. “Their losses were no less difficult and no less tragic than those that occurred later that same year. It is only fair that the families and small business owners who kept their savings with IndyMac receive the same protection as those who lost funds at other financial institutions but were covered by the higher deposit insurance amount.”
“Our bill will restore to IndyMac customers what they suddenly lost in July 2008, and treat them as equals to other Americans whose savings were swallowed by the economic crisis,” said Harman. “Congress can make these people whole again. We have spent a trillion dollars bailing out Wall Street, the auto industry and banks. It’s time for more help for Main Street.”
On July 11, 2008, IndyMac Bank of Pasadena, California was taken over by the FDIC due to concerns that the bank was close to failing. Tragically, more than 6,400 California depositors lost significant savings because at that time, the FDIC only insured deposits of up to $100,000. Just a few months later, as the financial crisis escalated, Congress acted to raise the FDIC deposit insurance amount to $250,000. However, it did not include depositors of banks which had already failed earlier in the year.
H.R. 5429 will retroactively apply the $250,000 FDIC insurance amount protection to depositors of any financial institution taken over by the FDIC after January 1, 2008. The bill will provide funds from an existing fund from which depositors are made whole (up to $250,000) should a bank fail. In December 2009, Dreier and Harman attempted to amend H.R. 4173, the Wall Street Reform and Consumer Protection Act, with nearly identical legislation. That amendment was rejected by the Democratic Majority.
In addition to helping former IndyMac depositors, H.R. 5429 will also help depositors of five other financial institutions to recover $10 million in lost savings. These banks include Hume Bank of Hume, Missouri; ANB Financial of Betonville, Arkansas; First Priority Bank of Bradenton, Florida; Columbian Bank and Trust of Topeka, Kansas; and, Silver State Bank of Henderson, Nevada.