updated 7/14/2008 4:18:52 PM ET 2008-07-14T20:18:52

IndyMac Bank, the second-largest financial institution to close in U.S. history, reopened Monday after being taken over by federal regulators.

Hundreds of worried customers lined up to pull as much money as they could from the failed financial institution.

However, federal regulators said it could be years before the affairs of the bank were fully resolved.

Charles Tengeri, a retired school teacher, was the first customer to emerge from the Pasadena headquarters of the bank.

He held a check for $171,000 — an amount that he said represented most of his savings.

"I didn't think this could happen," he said. "But I'm glad to get anything out."

New lending standards
The new chief executive, brought in by the government to manage the failed bank, said new lending standards should prevent the kind of problems that have brought down credit markets.

Video: Nervous about your money? John Bovenzi, the chief operating officer of the Federal Deposit Insurance Corp., reassured consumers that U.S. bank failures have been rare in the past, and that if more banks do fail, the government has enough in reserve.

"I think the important point to make is that, historically, only a very small percentage of the banks on our problem banks list ever failed," he said on CNN late Sunday. "While there are 90 banks on the list, there would be no expectation that 90 of those banks would fail."

Bovenzi took the helm of what will be IndyMac Federal Bank when the government stepped in late Friday afternoon to save the struggling institution.

The Office of Thrift Supervision transferred control of IndyMac to the FDIC because it did not think the lender could meet its depositors' demands.

Biggest regulated thrift failure
IndyMac is the largest regulated thrift to fail, regulators said after taking control of the bank. Thrifts differ from banks in that they are required to have at least 65 percent of their lending in mortgages and other consumer loans.

As of March 31, IndyMac had $19.06 billion in total deposits.

Bovenzi reminded consumers that all accounts worth $100,000 and less are automatically insured by the FDIC, which has $53 billion in insurance funds. And he noted that there are ways to structure accounts so that more than $100,000 is covered.

"If there are other bank failures in the coming weeks, I think the same message, if your accounts are under $100,000, you have absolutely nothing to worry about," he said. "You can still find ways to protect more if you like."

Beyond $53 billion, he said the FDIC would have go to other banks to raise more money, adding that in that case, consumers could expect some of that to be passed on in fees.

"Well, obviously it's a difficult time and there were certainly institutions that made loans that shouldn't have been made," he said. "There are standards being put out, hopefully, at institutions with better underwriting going forward so that this problem doesn't repeat itself."

200 in line at reopening
Customer Harvey Solvan said he had more than $100,000 in IndyMac.

"It's a question of how much we can get and how soon," he said while waiting in line.

Solvan spent Sunday night at a hotel near the bank so he could be at the door more than three hours before it opened at 9 a.m.

Two-hundred people were in line when the bank opened. A security guard at the door was allowing 10 people at a time to enter the branch.

Customers were orderly as the line stretched around the block.

The mortgage lender, which succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures, is the largest regulated thrift to fail and the second-largest financial institution to close in U.S. history, regulators said.

The Office of Thrift Supervision said it transferred IndyMac's operations to the Federal Deposit Insurance Corporation because it did not think the lender could meet its depositors' demands.

The FDIC insures bank deposits of up to $100,000 per depositor and up to $250,000 for funds in retirement accounts such as an IRA.

How to get uninsured deposits
Customers with uninsured deposits could begin making appointments to file a claim with the FDIC on Monday. The agency said it would pay unsecured depositors an advance dividend equal to half of the uninsured amount.

As of March 31, IndyMac had total deposits of $19.06 billion.

Some 10,000 depositors had funds in excess of the insured limit, for a total of $1 billion in potentially uninsured funds, the FDIC has said.

David Barr, an FDIC spokesman, was stationed outside the IndyMac headquarters on Monday. He said people might actually have more money insured than they think.

Customers will be informed about how their accounts are structured and may be eligible to recoup dollar-for-dollar beyond the $100,000 limit, he said.

If deposits aren't fully insured, customers will receive a receivership certificate and told about the process to possibly recoup more of their money.

It could take years to address claims
Barr said it may take several years before the FDIC completely resolves the collapse and addresses customer claims.

"We have to completely unwind the affairs" of the bank, he said. "We may sell a portion to another bank, sell real estate. There may be lawsuits. There are a lot of different aspects to this."

He said the FDIC will waive any early withdrawal penalties for certificates of deposit, with interest paid up to the withdrawal date.

Customer James Sherman said he also had more than $100,000 in the bank.

"This is my life savings here. I feel really horrible," he said.

Sherman said he was hoping to get 50 cents on the dollar above the federally insured limit, with the remainder possibly applied to his mortgage with IndyMac.

"What do you resort to now, putting money back in the mattress?' he asked.

Tengeri said he was hopeful about getting the remainder of his life savings from the bank.

"I'm keeping my fingers crossed," he said. "I have full trust in the U.S. government. It may take a little time but I'm not worried."

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