Bank Failures

After selling her Orange County home, Cheryl Hodgson parked an escrow check for about $360,000 with IndyMac Bancorp. Less than a month later, the Pasadena-based thrift was seized by the federal government -- and Hodgson lost $130,000. "I looked around at the interest rates and saw that IndyMac was offering a really good rate," Hodgson said. "You would think someone at the bank could have explained to me that I was putting in money well above the insurance limit."

A federal thrift regulator bungled its oversight of Downey Savings & Loan, allowing the Newport Beach thrift to pile on billions of dollars in high-risk mortgages and eventually collapse, according to a government report. The regulators from the beleaguered Office of Thrift Supervision also botched their oversight of Pomona-based PFF Bank & Trust, which collapsed along with Downey last fall, according to reports issued this week by the U.S. Treasury Department's inspector general.

European leaders called Tuesday for expanded transparency in the banking system to make the risks in complicated investment vehicles and troubled loan portfolios clearer to investors and shareholders. Failure by the banking system to step forward would result in more regulation to force them to do so, the leaders of Britain, France, Germany, Italy and the European Commission warned at a summit in London.

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.

The parent company of IndyMac Bank, the giant Pasadena-based mortgage lender taken over by the federal government last month, is seeking bankruptcy protection while it liquidates its remaining assets. In a Chapter 7 petition filed Thursday in U.S. Bankruptcy Court in Los Angeles, IndyMac Bancorp listed assets of $50 million to $100 million and liabilities of $100 million to $500 million. Regulators seized IndyMac Bank, the operating subsidiary, on July 11. The Federal Deposit Insurance Corp.

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.

Former IndyMac Bank workers who blame Sen. Charles E. Schumer for the collapse of the large Pasadena thrift have found an ally in their quest to hold the New York Democrat to account: a public relations firm with a Republican-heavy client list.

Ameribank Inc. of Northfork, W. Va., was closed by regulators Friday, as the deepening housing slump and soured real estate loans claimed a 12th bank this year. Ameribank, with $115 million in assets and $102 million in deposits, was shut by the Office of Thrift Supervision; the Federal Deposit Insurance Corp. was named the receiver. Pioneer Community Bank Inc. and the Citizens Savings Bank will assume the deposits from Ameribank.

When Congress voted last week to bail out Wall Street banks and investment houses, members were also indirectly voting to repair damage lawmakers themselves had caused during a decades-long era of deregulation. As the blame game moves into high gear in Washington, there seem to be few winners. Already under scrutiny are lawmakers from both political parties, Presidents George W.