U.S. takes over IndyMac Bank

Pasadena, Calif -- The U.S. government Friday took over IndyMac Bank, with federal regulators calling the bank's failure the second-largest in U.S. history.

The Office of Thrift Supervision said it has transferred control of the bank to the Federal Deposit Insurance Corp., the Los Angeles Times reported Friday. The FDIC plans to reopen the $32 billion bank Monday, the OTS said.

"Depositors will have no access to banking services online and by telephone this weekend, but will continue to have access to their funds this weekend by ATM, through other debit card transactions and by writing checks," the office said.

Online banking and telephone banking will not be available until Monday for customers of the bank, based in Pasadena, Calif.

The bank announced Monday it will substantially cut back its home mortgage lending and slash its workforce of 7,200 by about half. The announcement came after federal regulators removed IndyMac Bank from a listing of well-capitalized banks.

IndyMac stock has plunged and some depositors have been withdrawing their money.

The largest previous U.S. bank failure occurred in 1984, when the $40 billion Continental Illinois Bank failed, the newspaper said.

Copyright 2008 by United Press International.