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What the WaMu Collapse Means for Its Customers

Kimberly Lankford

Their money is safe and it will be business as usual as JP Morgan Chase takes over their accounts.



I have an account with Washington Mutual. What changed when the FDIC put the bank into receivership?

Not much. The FDIC took over Washington Mutual on September 25, 2008 -- the largest bank failure in history -- then almost immediately sold all of the bank's deposits, loans and branches to JP Morgan Chase for $1.9 billion. All accounts were transferred to Chase, regardless of the size, even if they were above the FDIC limits. Nobody lost any money on deposits at Washington Mutual.

"Life is exactly as it was for Washington Mutual customers on Friday as it was on Thursday except they are now backed by a bigger, stronger bank," says Chase spokesman Tom Kelly. Washington Mutual customers can continue to use their WaMu ATM cards, checks, debit and credit cards, online services and branches. Direct deposit and automated payments will remain the same, and Washington Mutual customers should continue to send their credit card and loan payments to the same place. Loan terms are governed by contract and will remain the same.

Washington Mutual customers will soon be able to use Chase ATMs fee-free, will eventually receive Chase debit cards (their WaMu debit cards will continue to work for now), and will receive Chase-branded credit cards when they reissue. Washington Mutual customers should continue to use WaMu branches, but should be able to use Chase branches sometime next year after the two banks' systems are merged.

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Washington Mutual customers who already had a Chase account eventually need to be careful about FDIC limits. Chase and WaMu will have separate FDIC limits for six months (or until your CDs mature after that), but then the FDIC limits will be combined -- with a total of $100,000 for individual accounts, $100,000 for your share of joint accounts, and $250,000 for retirement accounts, as it is at any one bank. For more information about FDIC limits, see Is My Bank Safe? for more information.

For more information, see the FDIC's Q&A Guide for Washington Mutual Customers or call the FDIC's call center at 877-275-3342.

Got a question? Ask Kim at askkim@kiplinger.com.



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