2004 Committee Charter : NDE

Purpose

The Audit Committee is appointed by the Board of Directors (the "Board") of IndyMac Bancorp, Inc. (the "Corporation"). The primary purpose of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities with respect to the integrity of the Corporation's financial statements, reports and other financial information provided by the Corporation to the stockholders and others, the independent auditor's qualifications, performance and independence, the performance of the Corporation's internal audit function, and the Corporation's compliance with legal and regulatory requirements (in concert with other Board committees as provided in Section 4(d), below). The Committee is also responsible to prepare an audit committee report, as required by the Securities and Exchange Commission (the "SEC") to be included in the Corporation's annual proxy statement. In furtherance of these purposes, the Audit Committee shall serve as an independent and objective monitor of the performance of the Corporation's financial reporting process and system of internal controls; maintain open and direct communication among the independent auditor, financial and senior management of the Corporation and of IndyMac Bank, F.S.B. (the "Bank"), the internal audit department, and the Board.

Composition

The Audit Committee shall be comprised of not less than three members, who shall be independent directors meeting the requirements for independence set forth in the listing requirements of the New York Stock Exchange (the "NYSE") and the rules of the SEC and shall be appointed by the Board on the recommendation of the Nominating and Corporate Governance Committee. All members of the Audit Committee shall be "financially literate," as the Board interprets such qualifications using its business judgment, or must become financially literate within a reasonable time period after appointment to the Audit Committee. At least one Audit Committee member will qualify as an "audit committee financial expert" as determined by the full Board by applying applicable SEC rules.

Meetings

The Audit Committee shall meet at least four times annually, or more frequently as circumstances dictate. The Audit Committee shall meet separately at least annually, and more often as warranted, with management, the Director of Internal Audit and the independent auditors in separate executive sessions to discuss any matters that the Audit Committee or any of these parties believes should be discussed privately. Subject to any requirements imposed by law or by the rules of the NYSE, the Audit Committee shall control its agenda in its sole discretion and shall be able to directly access senior managers of the Corporation and its subsidiaries.

Responsibilities and Duties

The Audit Committee's responsibility is oversight, and it recognizes that the Corporation's management is responsible for preparing the Corporation's financial statements and that the independent auditor is responsible to audit them. Additionally, the Audit Committee recognizes that financial management of the Corporation, the internal audit staff, and the independent auditors, have more knowledge and more detailed information about the Corporation than do the members of the Audit Committee; including the Audit Committee's designated financial expert(s). Consequently, while the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Corporation's financial statements and disclosures are complete and accurate or in accordance with Generally Accepted Accounting Principles ("GAAP") and applicable rules and regulations. The Audit Committee shall review the information provided by these independent sources, and provide Board level oversight, advice, counsel, and general direction, as it deems appropriate, to management and the independent auditors.
The following functions shall be the common recurring activities of the Audit Committee in carrying out its oversight responsibility. These functions are set forth as a guide with the understanding that the Audit Committee may, except as prohibited by law or under the rules set forth by the NYSE, diverge from this guide in appropriate circumstances.

1. Financial Reporting and Certifications:

a. The Audit Committee shall meet quarterly with financial management and the independent auditor to discuss the financial information contained in the Corporation's Quarterly Reports on Form l0-Q, including disclosures made in Management's Discussion and Analysis of Financial Condition and Results of Operations prior to its filing, and the results of the independent auditor's review of Interim Financial Information pursuant to SAS 71.

b. On a quarterly basis, the Audit Committee shall:


i. review the quarterly disclosures and financial certifications prepared by the CEO and CFO as required under the Sarbanes-Oxley Act of 2002, and any rules promulgated thereunder, including disclosure controls and procedures and internal controls over financial reporting and evaluations thereof;

ii. review and approve the adequacy of the Allowance for Loan Losses;

iii. review quarterly certifications and reports of negative press, insider fraud activity, or any submitted complaints or concerns (including those submitted confidentially and anonymously by employees of the Corporation) regarding the Corporation's accounting practices, its internal accounting controls and/or other auditing related matters, as gathered and reported by the Director of Internal Audit or General Counsel.


c. The Audit Committee shall review with management and the independent auditor at the completion of the annual audit of the Corporation's consolidated financial statements included in the Annual Report on Form 10-K for the last fiscal year and prior to its filing:


i. the Corporation's annual consolidated financial statements and related footnotes, including disclosures made in Management's Discussion and Analysis of Financial Condition and Results of Operations;

ii. the independent auditor's audit of the consolidated financial statements and their report;

iii. any significant changes required in the independent auditor's audit plan;

iv. any difficulties encountered during the course of the audit, including any significant disagreements with management;

v. management's assessment and assertion relating to the effectiveness of the Corporation's internal controls over financial reporting, as well as the independent auditor's attestation thereof;

vi. any management letter provided by the independent auditors and management's response to that letter; and

vii. other matters related to the conduct of the audit which are to be communicated to the Audit Committee under generally accepted auditing standards, including discussions relating to the independent auditor's judgments about such matters as the quality, not just the acceptability, of the Corporation's accounting practices and other items set forth in SAS 61 (Communications with Audit Committees) or such other auditing standards that may in time modify, supplement or replace SAS 61.


d. The Audit Committee shall review and discuss with management and the independent auditor, as applicable:


i. major issues regarding accounting principles and financial statement presentations, including any significant changes in the Corporation's selection or application of accounting principles, and major issues as to the adequacy of the Corporation's internal controls and any special audit steps adopted in light of material control deficiencies;

ii. analyses prepared by management or the independent auditor setting forth significant financial reporting issues, including analyses of the effect of alternative methods under GAAP on the financial statements;

iii. the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements;

iv. the general type and presentation of financial information included in earnings press releases (including any use of "pro-forma" or "adjusted" non-GAAP, information), as well as corporate financial information and earnings guidance provided to analysts and rating agencies;

v. any accounting adjustments that were noted or proposed by the independent auditor but were passed (as immaterial or otherwise);

vi. any communications between the independent auditor's audit team and the audit firm's national office respecting auditing or accounting issues presented by the engagement.


The Audit Committee shall not be responsible for oversight of individual transactions, including, but not limited to, whole loan sale, agency sale or securitization transactions.

2. Independent Auditor Responsibilities:

a. The Audit Committee, in its capacity as a committee of the Board, is directly responsible for the appointment, compensation, retention and oversight of the Corporation's independent auditor. Consistent with these responsibilities, it is recognized that the independent auditor shall report directly to the Audit Committee, and the Audit Committee shall have sole discretion over payment of compensation to the independent auditor for services rendered to the Corporation. The Audit Committee shall establish hiring policies for employees or former employees of the independent auditors. The Audit Committee shall periodically receive reports from the independent auditor that the independent auditor is not providing any prohibited services, is complying with regulatory partner rotation requirements, and that they are fulfilling other regulatory requirements promulgated under the Sarbanes-Oxley Act of 2002 and by the Public Company Accounting Oversight Board.
b. The Audit Committee shall pre-approve all audit and non-audit services provided by the independent auditor. The Audit Committee may delegate this authority, up to a pre-defined dollar limit, to the Audit Committee Chairman. Services pre-approved only by the Chairman are to be reported at the next regular Audit Committee meeting.

c. On an annual basis, the Audit Committee should review the qualification, independence, and performance of the independent auditor and present its conclusions to the Board in advance of the annual meeting of stockholders. As part of such annual review, the Audit Committee should review with the independent auditor, a written report that includes a description of the firm's internal quality control procedures; any material issues raised by the most recent internal quality control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and all relationships between the independent auditor and the Corporation. The Audit Committee will take appropriate action on any disclosed relationships or issues that may reasonably be thought to bear on the independence of the auditor and satisfy itself that the Corporation has engaged an independent auditor as required by the securities laws, including the Sarbanes-Oxley Act of 2002, administered by the Securities and Exchange Commission.

3. Internal Audit Responsibilities:

a. The Audit Committee shall review and concur in the appointment, replacement, reassignment or dismissal of the Director of Internal Audit and shall confirm and assure the objectivity of the Director.

b. The Audit Committee shall review the performance of the internal audit department, including the objectivity and authority of its reporting obligations, budget and staffing, the proposed audit plans for the coming year, and the coordination of such plans with the independent auditor.

c. The Audit Committee shall review, as needed, the internal audit department's charter, which shall define its purpose, authority, and responsibilities.

4. Risk Management, Ethical, Legal and Regulatory Matters:

a. The Audit Committee shall discuss the Corporation's guidelines and policies with respect to risk assessment and risk management. In consultation with the Director of Enterprise Risk Management, at least annually the Audit Committee shall review the Corporation's major financial risk exposures and the steps management has taken to monitor and control such exposures.

b. The Audit Committee shall establish and maintain a mechanism for the receipt, retention and treatment of complaints received by the Corporation from external parties and employees regarding accounting, internal accounting controls or auditing matters. The Audit Committee shall establish and maintain a procedure for the confidential, anonymous submission by Corporation employees of concerns regarding questionable accounting or auditing matters to the Committee.

c. The Audit Committee shall review and consider the results of any review of officers' expense accounts and perquisites, including their use of corporate assets, by the internal auditors or the independent auditor.

d. The Audit Committee shall review with the Director of Internal Audit the results of the internal audit department's review of compliance with the Corporation's Code of Conduct.

e. The Audit Committee and full Board, while acknowledging the Audit Committee's oversight responsibility toward the Corporation's compliance with legal and regulatory requirements, has delegated the ongoing oversight and monitoring of the following legal and regulatory matters:


i. The Nominating and Governance Committee shall oversee general litigation matters, insurance claims, corporate legal matters and contracts; and monitor compliance with insider lending and affiliate transaction rules; and act as the Corporation's Qualified Legal Compliance Committee ("QLCC") as described in its Charter;

ii. The Management Development and Compensation Committee shall oversee and monitor legal matters related to current and former employees, including laws regarding nondiscrimination in employment and human resource practices;

iii. The Community Lending, Compliance, Process and Technology Committee shall oversee and monitor compliance with consumer protection, anti-money laundering, bank protection and fair lending rules and regulations, as well as compliance with the Community Reinvestment Act; and

iv. The Bank's Board of Directors shall oversee and monitor compliance with the Office of Thrift Supervision's safety and soundness rules and regulations.


The Audit Committee shall receive reports on legal and regulatory matters from the General Counsel that may have a material impact on the Corporation's consolidated financial statements as needed, but no less than annually.

5. Committee Reports:

a. The Audit Committee shall prepare an Audit Committee Report as required by the SEC for inclusion in the annual stockholders' meeting proxy statement.

b. The Audit Committee shall perform an annual self-evaluation of its performance.

c. The Audit Committee shall review and reassess the adequacy of this Audit Committee Charter on an annual basis. This Charter will be included on the Corporation's internet site, as an appendix to the annual stockholders' meeting proxy statement at least once in every 3 year period and in the next annual stockholders' meeting proxy statement after any significant amendment to this Charter.

d. The Audit Committee will report its actions to the Board with such recommendations as the Audit Committee may deem appropriate.

6. Retention of Advisors:

a. The Audit Committee, in its sole discretion, shall have the right to retain independent legal counsel, or other independent consultants, to advise it on any matter relating to its duties or responsibilities.

b. The Audit Committee shall have the power to conduct or authorize investigations into any matters within its scope of responsibilities and shall be empowered to retain independent counsel, accountants, or others to assist it in the conduct of any investigation.

c. The Audit Committee has the authority to appropriate all funds deemed necessary by the Audit Committee to compensate any advisors or investigators retained by it, in addition to any funding the Audit Committee otherwise deems appropriate to carry out its duties.

7. Miscellaneous:

a. The duties and responsibilities of a member of the Audit Committee are in addition to those duties generally pertaining to a member of the Board.

b. The Audit Committee shall be responsible for the Board policies listed below:


i. Internal Controls

ii. Internal Audit

iii. Financial & Regulatory Reporting and Independent Auditing