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:
New York, Sept. 25, 2008 – JPMorgan Chase & Co. (NYSE: JPM) tonight announced it has acquired all deposits, assets and certain liabilities of Washington Mutual’s banking operations from the Federal Deposit Insurance Corporation (FDIC), effective immediately. Excluded from the transaction are the senior unsecured debt, subordinated debt, and preferred stock of Washington Mutual’s banks. JPMorgan Chase will not be acquiring any assets or liabilities of the banks’ parent holding company (WM) or the holding company’s non-bank subsidiaries. As part of this transaction, JPMorgan Chase will make a payment of approximately $1.9 billion to the FDIC.
The acquisition expands Chase’s consumer branch network into the attractive states of California, Florida and Washington State and creates the nation’s second-largest branch network – with locations reaching 42% of the U.S. population. The combined 5,400 branches in 23 states will also serve as an excellent base to extend the reach of the business banking, commercial banking, credit card, consumer lending and wealth management businesses. The acquisition also extends Chase’s retail branch network to additional states, including Georgia, Idaho, Nevada and Oregon…
Customers of both companies may continue banking as usual, and feel confident that their deposits are secure, now backed by the strength and security of JPMorgan Chase. Employees and vendors should continue to operate business as usual.
Chase expects to convert Washington Mutual’s consumer banking, home lending and credit card businesses to the Chase brand and technology platforms over the next two years. Chase and Washington Mutual customers should be able to access the combined network of 14,000 ATMs without fees in the coming months.
Updated January 25, 2011 and originally published September 26, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.