The FDIC strikes back

The FDIC has announced it will be filing lawsuits alleging negligence by bank officers at several closed banks, the Washington Post reports. It’s about time.

“The Federal Deposit Insurance Corp. has authorized lawsuits against more than 50 executives at failed banks across the country in an attempt to recover more than $1 billion of the agency's losses during the credit crisis.

“More than 50 bank officers and directors were negligent, committed fraud or otherwise breached their duties and are, therefore, legally liable, the FDIC concluded after lengthy investigations into the first wave of bank failures.”

The FDIC has paid our over $75 billion since 2008 in connection with bank failures. Previous recovery efforts in the late 1980s were successful.

"These investigations are now beginning to produce results, and we anticipate that many more will be authorized," FDIC Chairman Sheila C. Bair said in a statement Friday evening. "As a matter of policy, the FDIC believes strongly in accountability for directors and officers whose personal misconduct led to a bank's failure."

Only one lawsuit has been filed so far against officers of IndyMac Bank.

I hope we see more.

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