Chase: Business as usual for WaMu customers

Succumbing to problems in its home loan business that have been evident since 2006, WaMu was seized Thursday by the Federal Deposit Insurance Corp., which then sold the thrift's banking assets to JPMorgan Chase & Co. for $1.9 billion.

"Honestly I knew WaMu was in trouble, but I was a little surprised last night that it actually failed," said Debbie Pfeifer, 39, who lives in Seattle. "I feel kind of naive."

The director of communications for Wesabe, a personal finance Web site, she said she knows that her deposits are insured by the FDIC, which promised that the transition would be smooth, but she admitted feeling a little nervous heading to the bank Friday to withdraw some money.

Q: What does the sale mean for customers?
A: JPMorgan Chase assured customers on both the WaMu Web site and its own that it's business as usual after it assumed the deposit and loan accounts, and all branches of Washington Mutual. "You can continue to access your accounts just the way you've accessed them in the past: use your same branch, same debit, credit and ATM cards, same checks."

FDIC Chairman Sheila Bair also promised customers a seamless transition. For all depositors and other customers of WaMu, "this is simply a combination of two banks," she said.

Q: How safe is WaMu customers' money?
A: "No one lost any money that was deposited in Washington Mutual Bank," the FDIC said. FDIC insurance protects deposits up to $100,000, or $250,000 for some individual retirement accounts and 401(k)s. But that insurance should not be needed if the JPMorgan takeover proceeds smoothly. The purchase prevents WaMu's collapse from depleting the FDIC's insurance fund, which stood at $45 billion on Thursday.

JPMorgan bought WaMu's assets, which are valued at about $307 billion, for $1.9 billion. Now the nation's second largest bank, JPMorgan plans to write down about $31 billion worth of bad loans and sell $8 billion in common stock to raise capital.

Q: What about WaMu investors?
A: The news is much worse. Stockholders, who had already seen shares plunge 95 percent since their October high of $36.47, have the lowest priority for claims against WaMu. "Equity investors generally get the short end of the stick on these kinds of things," said "Stock Trader's Almanac" author and publisher Jeff Hirsch. "The company goes belly up, you lose."

Investors who hold senior notes or other debt will be notified by the FDIC as to their treatment as claimants of the receivership.

Q: Do direct deposit, automated payments, transfers remain the same? What about credit card and loan payments?
A: JPMorgan Chase says all those services will continue without interruption or change. Payment instructions and addresses remain the same.

Q: If customers have deposit accounts at both WaMu and Chase, are both insured?
A: Yes. FDIC regulations say deposits at WaMu that transferred to Chase will be separately insured from any accounts at Chase for at least six months after the sale. CDs from WaMu are separately insured until the earliest maturity date after the six-month period.

Q: When can WaMu customers bank at Chase bank branches?
A: Not yet, according to JPMorgan Chase, which will need some time to get the two systems combined.

Q: Can existing Chase bank customers make credit card, car loan or mortgage payments at a WaMu branch now?
A: No. JPMorgan Chase says the date for that isn't yet known.

Q: How big will JPMorgan Chase be now?
A: JPMorgan Chase, which also bought the investment bank Bear Stearns Cos. for about $1.4 billion in March, now trails only Bank of America Corp. in assets. For customers, it now has over 5,400 branches and 14,000 ATMs in 23 states.

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