IndyMac customers line up on bad news

PASADENA, Calif., July 15 (UPI) -- Banks stocks fell sharply on U.S. markets on a day the industry's insurer tried to reassure the public a recent bank failure was no cause for alarm.

The Federal Deposit Insurance Corp. said Monday that seizing control of IndyMac Bank of Pasadena, Calif., was "largely a non-event."

Thousands of customers, however, lined up at IndyMac outlets Monday to withdraw funds, the Los Angeles Times reported.

The FDIC said personal accounts of up to $100,000 and retirement accounts of up to $250,000 were fully guaranteed. But, about 10,000 of the bank's customers owned accounts that exceeded those limits, the Times reported.

Charles Tengeri, 70, told the Times he was praying for return of the remainder of his savings.

Tengeri waited in line for five hours to withdraw his money, leaving the bank with a check for $171,000, well short of the full amount -- worth more than $200,000 -- he had in IndyMac accounts, the newspaper said.

On the stock market, banks endured a punishing day, with share values for the group falling further in one day than they had since 1989, the Times reported.

Washington Mutual Inc. shares fell 35 percent, while California bank Downey Financial Corp. saw its shares tumble 24 percent.