Federal Deposit Insurance Corp

Federal regulators now believe that U.S. bank failures will cost the deposit insurance fund more than $40 billion over the next four years as the economy weakens, a government official said. John Bovenzi, Federal Deposit Insurance Corp. chief operating officer, said the agency's estimate last fall of $40 billion in losses through 2013 probably would be surpassed.

Revealing the recession's rising toll on financial firms, the Federal Deposit Insurance Corp. disclosed Friday that it had ordered six more California banks to clean up their acts in February after the agency examined their books and operations.

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.

Seeking to shore up its finances, federal regulators have ordered Vineyard National Bank of Corona to stop accepting so-called hot-money deposits that are considered too risky for the money-losing bank. Vineyard is among the growing group of Southland lenders battered by a wave of housing defaults, including mortgage giants Countrywide Financial Corp., which was acquired by Bank of America in January, and IndyMac Bancorp, which failed last month and was taken over by regulators.

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."

The Federal Deposit Insurance Corp. plans soon to sign a major lease of office space in Orange County, probably in Irvine, where as many as 600 people would liquidate the assets of troubled banks and thrifts based in California and other Western states. The agency needs 200,000 square feet of space and has looked at locations across Southern California, FDIC spokesman David Barr said. "It's a temporary office -- three to five years is what we're looking at," Barr said Tuesday.

Federal officials moved closer Wednesday to guaranteeing as much as $500 billion in mortgages after they are modified to make them more affordable to homeowners, part of the multifront battle to resuscitate the country's flagging economy. The idea, outlined last week by Federal Deposit Insurance Corp. Chairwoman Sheila C.