Bank Accounts

Wealthy U.S. taxpayers, concerned about an Internal Revenue Service crackdown on the use of secret overseas bank accounts as tax havens, are rushing to meet a Thursday deadline to disclose those accounts or face possible criminal prosecution. The concern was triggered this summer when Switzerland's largest bank, caught up in an international tax evasion dispute, said it would disclose the names of more than 4,000 of its U.S. account holders. The decision shattered a long-held belief that Swiss banks would guard the identities of its American customers as carefully as they did their money, and it raised concern that other international tax havens might be next.

About $7.5 million frozen in Swiss bank accounts will be given to Haiti's government at the end of September if the family of former dictator Jean-Claude "Baby Doc" Duvalier cannot prove that it has a legitimate claim to the money, the Swiss Justice Ministry said. Many in Haiti believe the money was stolen from public funds before Duvalier was ousted in 1986. He has always denied that.

Juan Murillo used to spend hundreds of dollars a year at check-cashing outlets because he was too intimidated by the U.S. banking system to open an account and did not speak enough English to write a check himself. When he finally summoned the courage to open a checking account at Bank of America, he found that he could withdraw cash, write checks and transfer money to his family in Mexico at no additional cost.

If you are an IndyMac Bank depositor, you probably have questions about the availability of your funds. Here are some answers: Should I worry about getting my money back? If you have less than $100,000 in your checking, savings and money market accounts or in certificates of deposit, you need not worry. The principal and interest are insured by the FDIC. The bank's 33 branches will be closed over the weekend and reopen Monday. Online and phone banking will also be unavailable until Monday.

The federal government took control of Pasadena-based IndyMac Bank on Friday in what regulators called the second-largest bank failure in U.S. history. Citing a massive run on deposits, regulators shut its main branch three hours early, leaving customers stunned and upset. One woman leaned on the locked doors, pleading with an employee inside: "Please, please, I want to take out a portion." All she could do was read a two-page notice taped to the door.

As thousands of customers waited hours in the heat Monday to withdraw deposits from failed IndyMac Bank, investors dumped the stocks of many mortgage lenders, precipitating the steepest one-day decline in banking shares since 1989. Southern California fixtures Downey Financial Corp. and FirstFed Financial Corp., specialists in the nontraditional mortgages that fueled the housing boom, were among the hardest hit, with their stock prices down 24% and 19% respectively.

The rules that govern federal deposit insurance are of more than passing interest to Bill Hogle, a 61-year-old Santa Monica retiree. More than half his wealth is tied up in certificates of deposit, and he lives on the income they produce. He knows his money is in different kinds of accounts that make him eligible for more than $100,000 of insurance, and he's been banking on that knowledge. But, in the aftermath of the failure of Pasadena-based IndyMac Bank, we're all increasingly nervous.

Struggling thrift Downey Financial Corp. said Monday that it succeeded in stanching a recent outflow of deposits. But the lender warned that if cash began to flee again, it could face a hard time lining up new sources of capital. Newport Beach-based Downey, parent of Downey Savings & Loan, said in a filing with the Securities and Exchange Commission that "the bank experienced elevated levels of deposit withdrawals" after June 30, when deposits totaled about $9.8 billion.

When IndyMac Bank was seized by regulators last month, its uninsured deposits totaled about $600 million, down from the $1 billion first estimated, the bank's new chief executive said in a memo to the staff Tuesday. The memo from John Bovenzi, the Federal Deposit Insurance Corp.

Hoping to prevent a repeat of some of the chaos that followed the federal takeover of failed IndyMac Bank, regulators on Friday eased some rules on FDIC insurance for one type of bank account. The account, called a revocable trust, is a deposit that can be owned by one or more people and is willed to a predetermined beneficiary or beneficiaries upon the death of the owner. Under previous rules, the owner of a revocable trust account was insured up to $100,000 for each "qualifying beneficiary."