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As dramatic as Washington Mutual Inc.'s collapse and overnight acquisition by J.P. Morgan Chase is, it is still business as usual for customers and all deposits are safe, according to the Federal Deposit Insurance Corp.
"It will be a seamless transition," said FDIC chairwoman Sheila Bair. "This is simply a combination of two banks."
Shareholders, on the other hand, aren't as lucky. Washington Mutual (WM:
0.16, -1.53, -90.3%) is expected to declare bankruptcy as soon as Friday, putting stock holders at the end of a long line of claimants. leaving them empty handed. Read more.
The FDIC has provided information on some common questions Washington Mutual customers might have:
What happens to my deposit accounts?
All accounts with Washington Mutual Bank have been transferred to J.P. Morgan Chase Bank. In fact, the WaMu Web site went directly to Chase as of Friday. Those deposit accounts include checking, savings, money market, CDs and retirement accounts. If your bank was WaMu on Thursday, it's J.P. Morgan Chase now.
Bail out (finance) - Wikipedia, the free encyclopedia
Bail out in economics and finance is a term used to describe a situation where a bankrupt or nearly bankrupt entity, such as a corporation or a bank, is given a fresh injection of ...
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bailout - definition of bailout by the Free Online Dictionary ...
bail·out (b l out) n. A rescue from financial difficulties: corporate bailouts.?
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Bail (disambiguation) - Wikipedia, the free encyclopedia
In finance, bail out (finance) is to rescue a person or corporation from bankruptcy, and similar. To bail out is to parachute out of an aircraft in an emergency.
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The Washington Monthly
And who exactly is going to bail out the U.S. Government? I watched the Republican Convention this past week and it seemed like a welcoming visitors from another planet.
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bailout financial definition of bailout. bailout finance term by the ...
bailout. The financial rescue of a faltering business or other organization. Government guarantees for loans made to Chrysler Corporation constituted a bailout.
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Bailout deal hits snags
WASHINGTON -- Talks over a massive bailout for the U.S. financial system stumbled as they entered their most critical hours, with some Republicans working Thursday to undermine a deal between key congressional leaders and reinvent the plan put ...
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Source: Detroit News
NewsDateTime: 31 minutes ago
Bailout pressure mounts as WaMu closure chills
NEW YORK/LONDON (Reuters) - Pressure mounted on lawmakers on Friday to agree on a $700 billion financial rescue plan after talks at the White House broke down in acrimony and the biggest bank closure in U.S. history roiled global markets. U.S ...
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Source: Boston Globe
NewsDateTime: 1 hour ago
Treasurys Attractive Again on Unease Over Bailout
Government debt prices rose Friday as safe-haven bids re-emerged after the breakdown of talks on a government bank bailout and the failure of Washington Mutual , the biggest bank closure in U.S. history. Market anxiety roared back as the $700 billion ...
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Source: CNBC
NewsDateTime: 1 hour ago
Stocks cut losses on bailout optimism
NEW YORK (Reuters) - The Dow Jones industrial average briefly turned positive on Friday as investors held out hope that Congress will pass a proposed financial sector rescue plan, tempering concern about the economy and the credit crisis. Both the ...
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Source: Reuters
NewsDateTime: 38 minutes ago
Wachovia, National City Slide on Bailout Fears
Shares of Wachovia and National City tumbled on worries about heavy mortgage losses after talks on a $700 billion financial sector bailout bogged down and federal regulators seized Washington Mutual in the largest bank failure in U.S. history. A ...
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Source: CNBC
NewsDateTime: 31 minutes ago
As a result of the acquisition, the New York City-based JPMorgan Chase will now boast some 5,400 branches in 23 states.
Federal regulators, who helped shepherd the deal, stressed that the transition for WaMu customers would be "seamless."
"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.
WaMu becomes the 13th bank to fail so far this year and earns the title of the nation's biggest bank failure by assets on record, ahead of Continental Illinois, which had about $40 billion in assets when it failed in May of 1984.
The FDIC, however, was also quick to point out Thursday evening that the WaMu-JPMorgan Chase deal would not have any impact to its insurance fund which covers customer deposits when banks fail.
"WaMu's balance sheet and the payment paid by JPMorgan Chase allowed a transaction in which neither the uninsured depositors nor the insurance fund absorbed any losses," Bair said.
The FDIC insures the assets held by 8,451 banking institutions with a total of $13.4 trillion.
Where do I send my mortgage or loan payments?
All those have been transferred to J.P. Morgan Chase as well. The payments won't be any different and you'll continue to send them to the same locations you did for WaMu. You can even continue to make your checks out to Washington Mutual Bank. Direct payment from your accounts will continue as usual.
What about my debit card?
Keep using it as you always have. It's still working and will continue to work.
What about direct deposits and bill paying? I just wrote a check out. Will it clear?
Again, no changes. All transactions will continue in their usual manner. Keep using the checks you have and paying bills in the manner you have.
I already had an account with J.P. Morgan Chase and now my combined balances exceed the $100,000 FDIC insured limit. What do I do?
The FDIC will continue to separately insure the accounts transferred to J.P. Morgan for at least six months. Consider it a grace period that will give you time to restructure your accounts and move money to another bank if desired.
What about my CDs? They won't mature in six months
The FDIC will continue to insure WaMu CDs until the earliest maturity date after the end of the six-month grace period. If your CD matures during this grace period and you renew it for the same term and dollar amount, it will still be insured separately until the first maturity date after the six-month period. If you renew it on any other basis, it loses that insurance after the six months is over.
What about the interest rates on my accounts? Will they change?
J.P. Morgan Chase will be reviewing the rates, but until then any interest accrued through Sept. 25 will be paid at the same rate.
I have a safe deposit box. Is that still, well, safe?
It is and you will continue to have access to it as always. You don't even have to do anything as part of the transaction.
I was in the middle of getting a loan. Now what?
Contact your loan officer. There have been no changes.
I don't have an account, but I'm a shareholder. Is there any value left?
It doesn't look like it. When WaMu files for bankruptcy, shareholders can make claims in receivership, but they're the last to be considered. Contact your accountant or the IRS to determine how to book the loss on your taxes.
What if I'm holding senior notes or subordinated debenture notes?
You get in line ahead of shareholders as claimants in a receivership and the FDIC will send you information shortly.
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