US savings and loan with $2.5 billion rescued after defaults

Partially rescued, at least. But hey, it's the 1980s all over again! Now how did a savings and loan collapse manage to somehow - mysteriously, really - not get mentioned until late in the day on a Friday? Do they have a loyal Bushie working there or something? It's not exactly a Northern Rock-like failure but it's not insignificant either. At issue with the failed NetBank is over-exposure to loan defaults. Customers have the standard $100,000 FDIC guarantee but it is not clear what happens with deposits that were above that amount though the bank has been purchased by Dutch giant ING.

While dozens of mortgage companies have closed due to soaring defaults of home loans made to borrowers with weak, or subprime, credit, those problems previously had occurred among non-bank lenders such as New Century Financial Corp. NetBank, in contrast, is federally regulated.

Loose mortgage standards in recent years — especially among lenders catering to subprime borrowers — have resulted in a spike in home loan defaults.

Bert Ely, a banking consultant based in Alexandria, Va., said NetBank was in "deep trouble" before the subprime mortgage market's woes accelerated this year. Regulators, he said, "should have closed it a long time ago."

"Regulators?" What regulators? The GOP has made sure such old-fashioned ideas such as oversight and regulation were made a thing of the past.