This would-be acquisition is turning into a mess. First Citi agreed to buy Wachovia’s deposits with the help of the FDIC. Wachovia accepted this deal under duress, apparently. The FDIC warned Wachovia that if they did not agree to the deal, the government would seize Wachovia’s deposits. That left Wachovia little choice but to accept.
Not much later, Wells Fargo stepped in with a better offer for Wachovia. This offer called for an acquisition of the entire operations of Wachovia, not just deposits, without the help of the government, for $15.1 billion in stock.
On Saturday, the FDIC succeeded in having the New York State Supreme Court block the deal between Wells Fargo and Wachovia, but on Sunday night, the ruling was overturned on appeal. Citi will appeal this decision.
It seems that the Wells Fargo deal is better for Wachovia, Wachovia’s shareholders, and the public. Wells Fargo will keep Wachovia intact and the FDIC will not be required to use taxpayer money to cover any losses. I don’t see any reason that anyone would favor the Citi deal.
Late Thursday night, JPMorgan Chase confirmed that it has acquired the deposits (bank accounts), assets, and “certain liabilities” of Washington Mutual. The acquisition has created the largest depository institution in the United States, with over $900 billion in bank accounts alone.
WaMu branches will become Chase branches as the acquisition progresses over the next two years.
Those who have bank accounts at Washington Mutual will not have any problems accessing their funds through the same means they do so currently. There is no run on cash; all money in savings accounts will be available. In fact, even deposits above the FDIC limits will most likely be available, because the FDIC wasn’t involved in this transaction at all. (Clarification: the Office of Thrift Supervision closed WaMu, handed the assets to FDIC, and FDIC brokered the auction of the assets.)
As a bonus, Chase customers and Washington Mutual customers will be able to share each other’s ATMs without fees.
There is no need to panic or pull money out of these accounts unless you don’t want to become a customer of Chase. It is possible, however, that Chase will lower Washington Mutual’s attractive interest rate offering of 4.0% APY, but nothing has been announced about this particular matter.
Here are relevant excerpts from the Chase press release: [click to continue…]
A few months ago, my girlfriend moved her checking and savings accounts, which where previously in separate, small, community-based banks, to Commerce Bank, a larger bank based mostly in New Jersey and New York City. I particularly like their long hours and the fact that they’re open on Sunday, and signed up for an account myself, given the branch’s proximity to my home.
When she signed up for an account, the sales representative let us know that the bank would soon be merged with TD Bank Financial Group and would become “TD Commerce Bank.” My biggest concern would be the stability of the level of service, but they assured us that nothing would change. I am hoping to see some improvements in their website technology but that may be asking too much.
The deal is done, but the branches have not yet started to change their branding and signage. That is scheduled to begin later this year. So far, I’ve seen no changes in service.
Yesterday, I received a letter from the President & CEO of Commerce Bank, and I would expect all of their customers received one as well. The letter contains self-praise for the current bank’s reputation for service as well as assurance that nothing other than the name and logo will change. The envelope also contained a pamphlet with questions and answers about the acquisition.
There are some interesting notes.
Will my accounts and services change? It’s business as usual, for now. There is no action required on your part and all your existing accounts, terms and agreements remain the same. You can continue to bank the way you do today, at any convenient Commerce location, over the phone, or online. We will keep you informed of changes that make impact you.
The last sentence is the most important point. There will be changes in the future, and at some point you may have to select a new savings or checking product in order to avoid fees. This is common in bank mergers in my experience; they want to move customers from legacy products and systems into whatever new products are available.
What is happening to the Penny Arcades in my Commerce store? Your Penny Arcades will continue to be available. We look forward to making more Penny Arcades available in the future through the new TD Commerce Bank locations.
The “Penny Arcade” is a large coin sorting machine. If you are a customer, you can bring bags of coins into your local branch, dump them into a machine which will then count your money, take a receipt to the teller, and deposit your funds or receive cash. I brought in a bag of nickels and the machine’s count was off by $0.05, and I’ve seen coins being left uncounted on a tray inside the machine before, so I don’t know if I fully trust this technology. But it is convenient.
Commerce gives treats to my kids and my dog, will you be changing this? No! We love your kids and your pets. You can continue to bank at the same locations and get the same great service you currently enjoy. This includes treats for the kids and your dog.
First, I’ve never seen anyone bring a dog into a bank branch. Is this common, outside of seeing eye dogs (who would not likely be allowed to take a treat)? Second, they love our kids?
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