Wednesday, July 16, 2008

Indymac & Me - How a Medium Broke The Bank

Just the other day, I joked with my wife, saying that I was "The King of all Psychics" because I did more than just predict the fall of Indymac Bank, I may actually have caused it.

On Friday, June 11th, 2008, federal regulators with the Office of Thrift Supervision (OTS) took over Pasadena based Indymac Bank. The takeover is already being billed as possibly the biggest bank failure in U.S. history. In the political onslaught of public finger pointing and blame placing that followed, the OTS pointed a very loud finger at NY Senator, Chuck Schumer, for causing a run on Indymac's deposits after issuing a public letter of concern about Indymac's fiscal viability. In turn, Senator Schumer fired back and said that the OTS had been "asleep at the switch" when it came to monitoring Indymac's lending practices.

While both parties may have cause for blame, I think it's time for me to be a man and own up to my own culpability in this dark story. So here goes my confession...

I created the advertising slogan that carried Indymac Bank to its grave.

Yes, the pen may be indeed mightier than the loan. For I wrote a slogan so clever in its simplicity, people couldn't believe our enemies hadn't thought of it first themselves. This slogan was lethal in it's precision. Though not intentional, this slogan encouraged brokers to dole out big bucks to both innocent and irresponsible FICO score refugees looking to own property in the badlands of Mortgageville. Unfortunately, the slogan was so precise in its purpose, it was completely blind to the risk posed by the shaky subprime loans that was propping it up.

There is more, though. Not only did I write a killer slogan, I wrote corporate prose that inspired thousands of other Indymac Bank employees to believe that this slogan made Indymac Bank an invincible steamroller of opportunity.

For all this creative hubris, I was paid handsomely, I was personally celebrated and I had my 15 minutes of fame extended to 16 1/2.

I am the guy who not only came up with "Let the fund begin!" (LTFB), I am the guy who talked up the verve "our guys" would feel in the field as our rally cry, "Let the fund begin!" carried them forward into battle, armed with our great loan products.

In my promotion of the slogan, I was relentless. I put "Let the fund begin!" on pins, shirts, hats, canvas bags, mugs, balls, keychains, banners, flashlights, anywhere big enough to hold our new call to crusade.

I started working at IndyMac Bank in April of 2004. I needed the job. My wife and I had moved to California a year earlier, needing a much deserved respite from Brooklyn, NY while we pursued our dreams of parenthood. My wife's job as a fashion designer had brought us to California, and I was sure that I could easily get freelance work as a marketing and advertising copywriter.

Well, it wasn't that easy. I didn't have that many connections, and the market was saturated with writers. Obviously, I hadn't realized how many failed or unemployed TV and movie writers had ventured into advertising.

By April 2004, I was a bit desperate. My head hunter called and asked me if I would be interested in a full-time gig writing for one of the country's top twenty online mortgage banks.

"Mortgage Bank?" I had no financial know-how whatsoever and despised anything to do with banks or financial services. "I'm perfect for it!" I replied, and within a year's time, my wife and I had moved to within a half mile of Indymac's mortgage bank headquarters in Pasadena.

2004 to 2005 was a big learning curve for me. Not only did I have to learn the ins and outs of the mortgage industry, I had to learn how to maneuver around the often schizophrenic mind of a government regulated money lender. By Schizophrenic, I mean that we were encouraged to be fearless in our pursuit of possible loan candidates, but at the same time, we were warned and admonished to not go so far as to be guilty of predatory lending practices.

At Indymac Bank, like at any other bank, that schizophrenic mind has a devil's advocate, a loud voice that tells you when to feel guilty and when to rationalize that guilt so you feel nothing when someone calls you on it later. That voice is the Corporate Compliance Officer.

Compliance Officers can find different meanings at the opposite ends of a Q-tip. They kill concepts like housewives kill roaches and ants; indiscriminately spraying their poison till everything stops moving, even business itself. I can remember many times when Indymac's compliance officers tried to stop "Let the fund begin!" in its tracks. I would argue and debate them every time. "Don't you get it!" I would plea. "How can we beat our competition in a cage fight, when you guys don't even unleash us from the post?"

Compliance was a huge concern at Indymac Bank. Federal regulators and consumer watchdog groups were constantly looking at what we were doing with our loan programs. Over and over again, we were lectured to not write anything in our advertising campaign that could be interpreted as enticing less than perfect credit borrowers with false promises or hiding from them the potential risks of the loans we were encouraging them to buy. Basically, we had to be as clean as possible getting risky borrowers through the door. Once inside, however, loan officers and underwriters had no problem shoving those compliance regulations into the back of their desk drawers to make room for new loan files.

Coincidentally, or not so coincidentally, the same month I started at Indymac bank, April 2004, I accepted my first monetary payment as a medium. I was paid $10 for a 15 minute reading as part of a fundraiser for the Spiritualist Church in Monrovia, CA. Though the $10 went to the church, I had broken a 20 year tradition of never accepting a penny for my spiritual work. This was an agonizing moment for me, but when the dirty transaction was complete, I had fallen from saint to sinner, from spiritual philanthropist to material capitalist, and there was no turning back.

The two years I spent at Indymac Bank, my spiritual self and my material self would wrestle with each other like rival brothers fighting for the top bunk. I was never fully comfortable with either role, medium or marketer. This past week, as Indymac Bank's massive failure graced headlines across the land, I couldn't help but feel a bit of that failure inside myself.

Though I know that my silly little slogan had nothing to do with the collapse of the bank, I think this episode serves as a perfect allegory for what can happen to our souls when our individual goals or our personal successes split us up into two equal but separate people.

As the rock group The Police once sang, we are "spirits in the material world."

When the two halves of who we are become too self aware, it's possible that those two halves can start to hate and blame each other for their codependency. This bifurcation of self is like living with a constant feeling of being homesick for a place you've never really been to. You, yourself, become aware that this feeling is irrational, but somehow you just can't really shake it.

Perhaps that's why we are here on this Earth, to experience this irrational schizophrenia of self. There are the many joys of individuality, but with them come the many pains and perils of seeing yourself as separate or different than others.

Both the separation and bond of the spirit self from the material self is what makes joy and agony such existential bedfellows. My belief is that this thing we call "life" has a lot to do with that experience. Some of us get it, and some of us don't, but it is a feeling we will quickly surrender when we reunite with the collective self that seems to guide us from a distant cliff of consciousness. So for me, Indymac will always be that station where my spirit self and my material self took different trains. They are on different tracks now, and I am homesick for that place I've never been to.

I still remember how on my last day at Indymac Bank, a co-worker tried to immortalize me by announcing, "you will always be remembered by the slogan you created." Just before I could get out a "God, I hope that's not true," I saw a John Lennon poster that humbly proclaimed, "Love is all you need." I immediately went home to work on a new slogan to be remembered by.

Epilogue: Marcel is currently living a topsy turvy life with a wonderful wife, two adorable kids, two unruly dogs and not a good slogan in sight.

For a brilliant and entertaining NPR podcast of how the whole mortgage crises came to be click here.