WaMu Becomes 13th Bank Failure

On Thursday, federal regulators moved in and seized Washington Mutual (WaMu).

Unlike many of the 12 bank failures that the FDIC has overseen this year, the J.P. Morgan-WaMu transaction isn't expected to impact the agency's national deposit-insurance fund. It wasn't immediately clear how the transaction would be structured to avoid the insurance fund taking a hit.
- Wall Street Journal

This failure marks the largest bank failure in U.S. history, Washington Mutual's. buyer will be J.P. Morgan Chase.

While the exact structure of the transaction wasn't immediately known, J.P. Morgan is expected to acquire Washington Mutual's deposits and branches, as well as other operations. The deal isn't expected to result in any hit to the Federal Deposit Insurance Corp.'s bank-insurance fund, according to a person familiar with the arrangement. Some analysts have worried that a WaMu failure could cost more than $20 billion.

Federal regulators have been heavily involved in orchestrating the transaction, which comes as WaMu grapples with its bad mortgage loans. Regulators were hoping to fend off a collapse of WaMu, which, with more than $300 billion in assets, would mark by far the largest banking failure in U.S. history.
- Wall Street Journal

--- All of WaMu’s deposits, including those above federal insurance limits, will be acquired by JPMorgan, so no depositors will lose money. Deposits totaled $188 billion as of June 30 but the sum is smaller now because of recent outflows.
- LA Times

I am still considering moving my Grocery fund from WaMu to a local bank, Topeka based Core First Bank, which recently expanded to Denver. Although, I would be interested in what JP Morgan-Chase might offer me.

"There will be no interruption in services and bank customers should expect business as usual come Friday morning," FDIC Chairman Sheila Bair said in a statement.
CNNmoney.com

Of course, I am more interested in the credit side of the terms, which seem a bit more fuzzy.

JPMorgan also is buying all of WaMu’s assets, meaning its outstanding mortgages, other loans and credit card business. So WaMu borrowers now will become JPMorgan borrowers.
- LA Times

Since, I transferred my Fingerhut debt to a 0% WaMu card, this will be one that affects me. I called customer service and they said no comments were being made at this time. After further questioning, they didn't have any information.

All of WaMu’s 2,239 branches nationwide in 15 states will become part of JPMorgan’s Chase retail bank system.
- LA Times

The big question I have. Will JP Morgan change the name on WaMu branches? or will they keep the WaMu name, like they did when they took over Bear Stearns earlier this year?

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go ahead share your thoughts with me now.

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