Ryan Carter, Staff Writer
Created: 05/27/2010 08:48:14 PM PDT
Southern California lawmakers Thursday re-introduced an amendment to financial reform that would allow depositors at the failed Pasadena- based IndyMac Bank to recoup about $233 million in lost savings.
The amendment, called the Indy Act, would make a federal deposit insurance cap of $250,000 retroactive to the time IndyMac failed in July 2008.
That would allow many former depositors to be made whole.
At the time, deposit insurance covered only up to $100,000. But a few months later, after other major banks began to fail and the financial crisis grew, Congress approved the higher cap.
But because IndyMac was among the first to fail under the weight of the subprime mortgage meltdown, the cap did not extend to before October 2008, when the Federal Deposit Insurance Corp. seized IndyMac.
“This is just a natural. … The whole thing is about fairness,” said Rep. David Dreier, R-San Dimas, who along with Rep. Jane Harman, D-Venice, introduced the bill Thursday.
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