Via The Daily Caller
Economist Jerry Bower told TheDCNF that “we know that Schumer’s letter destroyed that bank … [it was a] “nuclear bomb” [and] “a lot of people lost their jobs. Depositors were terrified. It was destructive of the local economy.” Bower estimated that IndyMac’s collapse cost taxpayers at least $4 billion.
When a bank is in trouble, the FDIC privately canvasses financial groups to find a buyer. But Schumer’s letter scared away prospective buyers.
The New York Times reported that “IndyMac was being shopped to potential investors this summer, but their interest disappeared after Mr. Schumer’s comments, said Timothy T. Ward, deputy director of examinations, supervision and consumer protection at the O.T.S.”
Bloomberg News noted that few investment groups other than one led by Mnuchin made offers, reporting that “in the fall of 2008, very few institutions or individuals were looking to go long on mortgages and mortgage-backed debt. Mnuchin was one.”
Then a New York-based private investor, Mnuchin’s winning offer was $800 million higher than the second highest bidder.
Schumer has never admitted he caused the bank’s collapse, blaming instead OTS and claiming “OTS ought to stop pointing false fingers of blame and start doing its job to protect the future of the banking system, so that there won’t be other IndyMacs.”
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