The regulatory Office of Thrift Supervision (OTS) announced Friday it had placed the California-based bank, worth an estimated 32 billion dollars, under the control of the Federal Deposit Insurance Corporation (FDIC).
The mortgage lender, which will reopen as IndyMac Federal Bank, marked the largest bank failure in a year of mortgage and foreclosure crisis highlighted by a surge in defaults and a plunge in housing prices which are rippling through the US economy.
The FDIC stressed Saturday that it was seeking to return the bank to private operation within a few months.
"When we reopen Monday, we will begin the process of marketing this bank to try to get it back into the private sector. We expect that to take about 90 days," FDIC spokesman David Barr said on CNN television.
Barr said the FDIC had already fielded more than 9,000 calls from panicky customers wondering if their money was safe.
FDIC guarantees 100 percent of personal investments up to 100,000 dollars.
The bank