Is it a bank or a thrift?

Hal Morris, writing on his Grumpy Editor blog, notes that many media outlets have been using the term “bank” to refer to IndyMac Bank when it’s actually a thrift.

Morris writes, “Equally fuzzy were many reporters, editors, headline writers and broadcasters on the type of institution that was closed, notes Grumpy Editor.

“Most simply used the word ‘bank.’

“That was partially correct — but technically wrong.

“What confuses things is ‘bank’ in the name of the institution.  The full name of the failed operation:  IndyMac Bank, FSB.  The FSB stands for federal savings bank, which is different from a commercial bank such as Bank of America.

“A savings bank’s primary purpose is accepting deposits and putting those funds to work as a mortgage lender.  Clouding things somewhat is that since deregulation in the 1980s, a savings bank can offer services competitive with many commercial banks.

“Along with savings and loan associations, savings banks also are called ‘thrifts.’  So thrift, correctly, should be in headlines and texts relating to IndyMac.”

Read more here.