GLASS HOUSES: How Clueless Chuck Schumer Was Responsible for the 2nd Largest Bank Failure in History


In 2008. IndyMac had solid deposits and was in the process of selling out when Chucky Schumer decided to send a public letter to federal regulators saying that he was concerned about the bank failing, which it wasn’t at the time of the letter.

But over the next 11 days, depositors withdrew an astonishing 1.3 billion from the bank and that led to its downfall. Schumer now claims that he was not responsible for the bank failure, but I think it was intentional. IndyMac became One West Bank and was bought in 2009 by a group of Democrats including George Soros for 1.55 billion dollars, which they then sold for 3.4 billion to CIT Group.

From The Daily Caller

News reports filed at the time squarely place the blame the bank’s failure on Schumer. The Los Angeles Times, for example, reported July 2, 2008, that “the letter stunned some Wall Street analysts, who said Schumer was in effect sealing the lender’s fate by raising the prospect of its failure.”

Schumer’s action was so irresponsible that the federal Office of Thrift Supervision explicitly blamed Schumer for IndyMac’s collapse, saying in a July 11, 2008, press release that “the immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York.”

OTS director John D. Reich went further saying, “When a member of the United States Senate makes such a public statement, it doesn’t take much to frighten the depositors of an institution,” according to the Washington Post. “It was an unprecedented act on the senator’s part and the result speaks for itself.”

Comptroller of the Currency John D. Hawke, who began his term during President Clinton’s tenure, said Schumer’s act was “incredibly stupid,” adding that “leaking his IndyMac letter to the press was reckless and grossly irresponsible. I don’t see how he can be trusted with confidential information in the future.”

I wonder if Soros repaid Schumer with an envelope full of cash or campaign cash. Even a layman knows that putting out that type of letter to the public will start a run and even some of the strongest banks in the country can’t survive a major run.

Kind of odd that Soros turned out to be a big winner, huh?

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