In a significant development for financial institution directors and officers, the Federal Deposition Insurance Corporation (FDIC) has filed the first lawsuit in the current financial crisis against former officers of a closed financial institution arising from alleged loan losses to the bank. On July 2, 2010, the FDIC filed a complaint in federal court in California against former officers of the homebuilding division of IndyMac Bank for civil money damages. FDIC v. Van Dellen, Case No. 2:10-cv-04915-DSF-SH (C.D. Cal.) (July 2, 2010).
On Friday, the Illinois Department of Financial Professional Regulation - Division of Banking closed Midwest Bank and Trust Company, headquartered in Elmwood Park, Illinois, and appointed the FDIC as receiver.
On April 20, the House Committee on Financial Services held a hearing to discuss public policy issues raised by last month’s report of court-appointed bankruptcy examiner for Lehman Brothers Holdings Inc. (Lehman Brothers), Mr. Anton R. Valukas. The Committee heard testimony from the following witnesses:
Panel One:
Treasury's most recent Transactions Report reveals a loss of $2,334,120,000 from two institutions in bankruptcy.
This past Monday, in the wake of last month's termination of TCW Group, Inc.
Yesterday, FDIC Chairman Sheila Bair, the keynote speaker at the Institute of International Bankers Cross-Border Insolvency Issues Conference in New York, stressed the need to end the “too big to fail” mentality by “eliminating the belief that the government will always support large, interconnected financial firms.” Chairman Bair noted that in order to do so, “we need an effective mechanism to close large, financial intermediaries when they get into trouble.”
On Friday, the FDIC was named as receiver for two failed subsidiaries of Irwin Financial Corporation, headquartered in Columbus, Indiana.
Yesterday, the Oregon Division of Finance & Corporate Securities closed Community First Bank, Prineville, Oregon, and named the FDIC as receiver.