Are Savings of IndyMac Patrons Safe?

This is a rush transcript from "Your World with Neil Cavuto," July 15, 2008. This copy may not be in its final form and may be updated.

CONNELL MCSHANE, GUEST HOST: The run on IndyMac has depositors across the country wondering if they're money is safe.

And Sheila Bair is the chairman of the FDIC, which insures depositors.

Sheila joins us now to talk about this.

I mean, what if you have more than $100,000, Sheila, in one bank account, and you're watching this program today? What do you do about it?

SHEILA BAIR, CHAIRWOMAN, FEDERAL DEPOSIT INSURANCE CORPORATION: Well, you can have over $100,000 and still be fully protected. It depends on how your accounts are structured.

Video: Watch the interview

You get $100,000 for a single account, another $100,000 for a joint account. For instance, revokable trust, you can get $100,000 per beneficiary.

If you have any questions, you should go to your bank and ask them or call our call center, 1-877-ASK-FDIC, or go to our Web site at

There is something called the Electronic Deposit Insurance Estimator, or EDIE, on our Web site, and it can help you determine whether you are fully insured.

MCSHANE: All right, that's interesting. So, married couples can get up to $200,000 as long as they have a joint bank account?


BAIR: Actually, they can get up to $400,000 if they each have an individual and then a joint together. There would be $400,000...


MCSHANE: What about people with retirement accounts? Because you think about large sums of money, whether it's $200,000, $300,000, $400,000, $500,000, a lot of times, those are in retirement accounts. What do you say to those people?

BAIR: Right.

Well, IRAs and other tax-deferred retirement accounts are eligible for an additional $250,000 per institution. So, again, you should talk with your bank or call our call center to determine whether you are properly insured. But a $250,000 for retirement account in a bank is more than ample for most folks.

MCSHANE: Now, what do you say to these scenes out in California, where people are essentially running into a place like IndyMac, which is in the news, and trying to pull their money out? That's not the right thing to do, is it?


BAIR: No, it's not, really.

In a sense, IndyMac is the absolutely safest place now, because it has already failed. We have control of it. So, it's certainly not going to fail again.


BAIR: Your insured deposits are absolutely safe. They are accessible online. It is not necessary for you to change your banking relationship.

But you can do that online if you want to. You can make ATM withdrawals. You can write checks. You can anything that you could before we took over as conservator. So, and if you are uninsured, coming to the bank really is not going to make any difference either.

Our claims agents are working, reaching out to you. They're setting up phone interviews. They will work with you on the phone. I understand the desire of people to come and interact personally, but it is really not necessary.

MCSHANE: Not the thing to do, OK.

BAIR: And I do — it's inconvenient. And I worry about people standing out in the heat as well. So...

MCSHANE: That said, these people are recognizing what we already know, is that there is...

BAIR: Right.

MCSHANE: We can debate over the extent of it, but there are problems with banking system in this country.

BAIR: Right.

MCSHANE: What do we do about it? What is the most important thing that can be done to solve the problems that are plaguing that industry?

BAIR: Right.

Well, I think it should be reemphasized that, overwhelmingly, the vast majority of banks are safe and sound, very well-capitalized. We are seeing an increase in what we have called our troubled banks. There will be an increase in bank failures, but we have only had five bank failures this year.

IndyMac, though a fairly sizable institution, is only one of the 8,500 depository institutions. It's 0.2 percent of industry assets. So, I think it is important to put the problem context.


MCSHANE: But it is still a problem, right? It is still a problem?

BAIR: It is still a problem.


MCSHANE: So, what do we do about the problem?

BAIR: Well, I think — I have been saying for a long time we need to tackle the problem at the core, which is the housing problem. And we need to drill down to borrowers with unaffordable loans. We keep seeing foreclosures escalate, with homes — more and more homes going into foreclosure, putting downward pressure on home prices, which is creating more economic and housing distress.

BAIR: Right.

MCSHANE: So, for well over a year, we have been strongly encouraged - - encouraging Congress and others to tackle the problem, the housing problem.

But I think, as supervisors, we have been very closely monitoring institutions who have made high-risk loans. In the areas of the country where have a lot of distress...


BAIR: ... we have been encouraging them to raise capital, get their loan loss reserves up. And we will continue to do that vigorously.

MCSHANE: All right, Sheila Bair, the chairwoman of the FDIC, we appreciate your time today.

BAIR: My pleasure.


Content and Programming Copyright 2008 Fox News Network, Inc. ALL RIGHTS RESERVED. Transcription Copyright 2008 Voxant, Inc. (, which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, Inc.'s and Voxant Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.