Business as usual for JPMorgan's WaMu
Late Thursday, the FDIC took over Washington Mutual and sold the bank to JPMorgan. Host Tess Vigeland asks Marketplace's Bob Moon what the new ownership will mean for current WaMu customers.
A Washington Mutual ATM and branch in Lincolnshire, Illinois (Tim Boyle/Getty Images)
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TEXT OF INTERVIEW
Tess Vigeland: Alright, we're still getting lots of concern coming into our inbox about bank safety and this week did not provide much relief on that front.
Washington Mutual, the nation's largest savings and loan, was taken over by JPMorgan in something of a midnight massacre -- not that we didn't see it coming. WaMu's share price has been steadily eroding for a couple of weeks.
But joining us once again is Marketplace Senior Business Correspondent Bob Moon. Hello again Bob.
Bob Moon: Hey Tess. Now I just got this offer in the mail here. It's from WaMu. Do you think it's any good?
Vigeland: I'm hoping that it is?
Moon: Actually, that is the answer. It's probably still good. They're probably going to extend me whatever credit they've offered here.
Vigeland: If you take it...
Moon: Yes, and we'll see where that goes.
Vigeland: You know, if you've got an account at Washington Mutual, what happens to your money?
Moon: We've been talking a lot about how your deposits are insured by the FDIC -- up to $100,000, $200,000 in a joint account. Well, that doesn't apply in this case and that's good news, because what's happened here is regardless of the dollar amount in your WaMu account, nobody lost any money because all the deposit accounts have simply been transferred to JPMorgan Chase. That includes checking, savings, money market, retirement, all certificates of deposit, so even if your money wasn't fully insured by the FDIC here, you don't lose access to any of your money and it should be business as usual.
Vigeland: So you really shouldn't see any difference at all. You'll be able to go to the ATM, you'll be able to write checks. This is just a bank merger, basically.
Moon: That's right. You're going to get your money with the same interest rates if it's an interest-bearing deposit account. If you have, let's say, a loan through WaMu, you keep making your checks payable to Washington Mutual for now. You'll be mailing them to the same place. If you set up a direct withdrawal for a payment, that should work the same and your due date should be the same along with your payment.
Vigeland: Now for the bad news: if I'm a WaMu shareholder?
Moon: Yeah, you pretty much lost all your stock value there. You've got the lowest priority in a receivership and what happened here is that JPMorgan bought the banking part, but they didn't buy the holding company or the management part. I would advise you to check with your accountant; maybe you have a tax loss to declare.
Vigeland: Just to repeat again: all the branches are going to stay open, all the ATMs are going to work, this is business as usual.
Moon: That's right. In fact, Jamie Dimon, the CEO of JPMorgan Chase, said in his conference call late Thursday night that he's treating this exactly like a traditional merger. That means you're going to eventually see a rebranding to Chase Bank. And listen to Mr. Dimon talking about how he sees this as a strong acquisition, not something he's going to be turning around and liquidating:
Jamie Dimon: We think that this builds a great franchise for us. Obviously, we add a whole bunch of states -- California, Florida -- and enhance states we're already in. We're building this franchise for the long-term, not for next year or the next five years, but for the next hundred years.
Moon: So that sure doesn't sound like a bank that's going to be on shaky ground going forward.
Vigeland: Boy, that is really nice to hear.
Moon: Reassuring.
Vigeland: Thanks so much Bob.
Comments
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From Canyon Lake, CA, 09/27/2008
Executive compensation-- where to begin? Over the last thirty years I have seen executives and boards form faustian bonds and abscond to their villas when losses mount but who gets hit with their loss and mess in the face. We do. Wage earners face the cutbacks, the downsizing of salaries, hours, or benefits. What does Washington do? Nothing. Unbridled capitalism is unbridled greed. There is nothing about community, or taking care of families and community in Adam Smith's world. Now we see Mr. Smith invisible hand naked, and on fire. And oh yes, we wage-earners and taxpayers are supposed to rush to the fire and pour dollars on it. Why don't the runaway Wallstreeters liquidate their villas and mansions and pour those funds on the burn? The Wallstreeters should get out their gold-trimmed bootstraps and give a few tugs to put their cash back into the system or get some real jail time.
From CA, 09/26/2008
CEO of failed WaMu could get millions
The Associated PressPublished: September 26, 2008
WASHINGTON: The CEO of failed Washington Mutual Inc., on the job only a few weeks before the largest U.S. thrift was seized by the government and sold to JPMorgan Chase & Co., is entitled to more than $13 million in severance and bonus pay.
Alan H. Fishman signed an agreement that provides around $6 million in cash severance and retention of his signing bonus of $7.5 million if he were to leave his job, according to a company filing with the Securities and Exchange Commission.
THIS IS INSANE!!!! It's not as though this idiot began his illustrious
career in the mail room, slaving day after day, year after year, rising to the top with Washington Mutual. No! He was only on the job with WaMU for a few weeks! Is it any wonder the American public is to the point of hysteria, and ready to throw out every single member of Congress?
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