Schumer will not be Investigated by California AG
Attorney
(866) 735-1102 Ext 385
Tags: indymac,
fdic,
fed,
schumer,
jerry brown,
california,
TILA violations,
subprime,
alt-a loans,
mortgage crisis,
housing crisis New York senator Charles Schumer will not be investigated for comments made about IndyMac Bancorp days before its collapse. California Attorney General Jerry Brown, on Thursday, sent a thanks-but-no-thanks letter to former IndyMac employees who had requested a Schumer probe.
The general public, particularly IndyMac customers, have taken swipes at Sen. Schumer over the last month and a half, alleging that it was his fault for the bank's demise. When in fact, the bank would have failed had he made his statements about its financial health or not. Since last summer, IndyMac had been struggling to show profits, and when its Alt-A loans began defaulting at alarming rates, the bank had a hard time finding ways to raise capital.
Sen. Schumer made a point to tell federal regulators that they should investigate the bank's financial status, whether the bank would be likely to fail soon, and reiterating that the OTC had a duty to inform IndyMac customers should only continue banking with extreme caution, particularly customers with more than $100,000 in the struggling bank (as the FDIC only insures fully up to $100,000). Also, the OTC should have been more aware of what was going on at IndyMac from the point of its financial declivity, instead of trying to hang Schumer out to dry. Schumer only needs to be accountable for what he said, had he said anything that wasn't true, not for what the bank had been doing for months (as this was obvious to most regulators when Schumer said it and it's even more obvious now).
The general public, unfortunately, was not aware of some of the loans that were being written at IndyMac, loans with several TILA violations. Had the general public known that, or if a senator had the knowledge of that occurring at IndyMac and relayed it to the public (had he or she not, they would, of course, been viewed as being corrupt by special interests), then Schumer would not have had to been the bearer of bad news; not to mention that the bank wouldn't have been in such financial ruins.
We should all do our best, especially concerning situations where someone is relaying bad news, to abide by the timeless expression that was first used in Shakespeare's Henry IV, "Don't shoot the messenger."