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The one thing that can defeat Big Money’s influence on Congress is public opinion, Rep. Barney Frank said at the Consumer Federation of America awards ceremony last night.

Frank was talking about the media’s role in focusing attention on important issues of the day, and how often we (the public and the media) get distracted by the trivial (like, say, Balloon Boy) and even the not-so-trivial. If the BP oil spill had happened two months earlier, Frank wondered if the financial reform bill would have ever been passed. Enough attention at the right time can make a huge difference.

So can the little guy, as long as those big money forces aren’t arrayed against him—or her. A flight instructor, a part-time journalist and a deputy sheriff are among the IndyMac depositors who waged what looks to be a successful campaign to get retroactive coverage for their accounts.

IndyMac failed before FDIC insurance limits were raised to $250,000. The increase was supposed to be temporary and not retroactive, but the financial reform bill includes provisions to make it permanent and to cover depositors whose banks collapsed earlier.

From  “Humble start for FDIC shift” from the Wall Street Journal:

Some Republicans say the rescue is little more than a bailout of careless depositors, especially given the brutal losses suffered by investors in collapsed financial firms. “It will cause people to think, I don’t have to worry about taking the right precautions,” said a spokeswoman for Rep. Scott Garrett (R., N.J.).

Rep. Jane Harman (D., Calif.), who co-sponsored the rescue with Rep. David Dreier (R., Calif.), says she was moved by nightmarish stories from depositors who say they were misled by IndyMac about their coverage. In some cases, account beneficiaries or joint owners say they were left off documents that would have qualified them for more than the standard $100,000 in protection. Some depositors say important records were lost after IndyMac’s seizure.

“It was a matter of fairness,” Ms. Harman says. “My view is that they were victims of the bank’s failure, not the cause.”

An FDIC spokesman said the retroactive rescue “would provide a more-even treatment of uninsured depositors since the onset of the crisis.”

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Categories : Liz's Blog

7 Comments

1

Thanks for covering this important issue for the little guys, the ones who lost savings. I don’t consider getting money back that I earned and was mine a bailout. The bailout is what government has offered to companies too greedy, and big to fail.

I commend the equality fighters – our leaders and all the people in our Indymac group who have made this campaign successful. But it could not have been successful without the work of Jane Harman and David Dreir. They have listened to the little people and given a chance for equal treatment in a cruel world. Thanks to all!!!

2
Darlene Van Harlingen
June 25th, 2010 at 10:02 pm

Dear Liz,
Thanks so much for covering this fantastic story. This means untiring effort, hours of hard work, and many people working together including Senators Harman and Dreier have been successful in getting fairness. I’m an Indy Mac depositor and am forever grateful to Lisa, Fran, Cheryl, Don, and all the others that had faith and didn’t give up. Most depositors are not rich and this is our life’s savings. It is not a bailout, but only getting back what is rightfully ours, our money.

3

well said. 100% agree with you.

4

Your article correctly describes the three women who formed our IndyMac Depositors group. These ladies have guided our group and successfully infuluenced our political leaders. This is a result of their selfless efforts to correct and make known previous government, FDIC, & bankers errors and omissions. I wish to thank Barney Frank, Jane Harman and David Dreir for listening and acting to create fairness for citizens. Giving this hope to the “little guy” restores my faith in the leaders of our country.
THANK YOU, Lis Weston for WRITING and PRINTING the TRUTH.

5

Thanks for your comments. The $100,000 limit was set in 1980 and hadn’t been changed. The new limit is basically the old limit, adjusted for inflation.

6

I’m not sure, but I don’t think the “final” vote on that “permanent” deal has been taken yet. So I don’t think its fact yet. I think the vote is supposed to be before the 4th July. I hope it goes through, other wise I’ll have more decisions to make.

It was Indy Mac that made me pull out my CD’s at Wachovia right after it went down, I was over the limit, had a good banker that re did the due dates saving me the penalty’s.

However now looking back I could have left it there as Wells Fargo took ALL deposits and things went on as usual, I lost 6% on 2 CD’s that were good till Oct 2011, I left one there still getting the 6%

Now I keep moving around hunting for something over 1% on 12 month cd’s, until I know for a fact the limit IS a done deal at 250K, and can look for a longer term.

7

Thank you for telling this story in a way few others have. Most people believe that if you have over $100,000.00 then you don’t deserve fair treatment because you are rich. Having a large amount in CDs represents a lifetime of making decisions not to spend it elsewhere, saving little by little. The purpose to deposit in CDs means we are valuing safety. For me, the loss resulted not in ignorance or lack of due diligence… it was because IndyMac failed to complete a signature card. They left off entirely the named beneficiaries on a Payable on Death account. This retroactive increase was recommended by the head of the FDIC, and was the only fair way to resolve the issue for hundreds of depositors that subject to malfeasance by IndyMac.