Results tagged “fdic”

It was nearly a year ago we when witnessed the financial meltdown and takeover of 119-year old Washington Mutual. Banking FAIL! Flash forward to today, KING5-TV reports close to 100 former vice-presidents and other mid-to-senior level executives of the now-defunct WaMu have filed lawsuits against the Federal Deposit Insurance Corporation (FDIC) seeking the government (or, perhaps ultimately the taxpayers) to pay up the millions they're owed.

Just two hours after we got back from a day-trip to Bremerton and its beautiful waterfront, we got an email announcing that Bremerton's Westsound Bank was defunct. The Washington Department of Financial Institutions (DFI) took possession, "citing severe asset problems, significant losses and inadequate capital," brought in the Federal Deposit Insurance Corporation (FDIC), and the FDIC sold Westsound to Kitsap Bank of Port Orchard.

For a few months now, emails from our friend who still works at WaMu have come with the epilogue: "WaMu, now backed by the strength of JPMorgan Chase."

Marketwatch has a good FAQ for Washington Mutual clients wondering if their money is still there. Short answer: it's all good. Unless you're a shareholder. Shareholders are screwed--officially, whenever what's left of WaMu declares bankruptcy. Alan Fishman, WaMu's 3-week CEO, is not screwed, though it may be difficult for him to find another job that pays $18 million per month. WaMu depositors precipitated the bank's failure by withdrawing $16.7 billion in a little over a week. The only silver lining is that buyer "JPMorgan Chase will absorb at least $31 billion in losses that would normally have fallen to the F.D.I.C."

JPMorgan Chase is holding a conference call at 6:15 p.m. today, and the expected topic is its purchase of (part of) Washington Mutual. WaMu was frenetically batting its eyelashes at any suitor within bidding distance, especially with news of a bailout in the offing, potentially keeping WaMu's toxic mortgage holdings from being a dead loss. Bloomberg says that federal regulators decided to press the issue, and seized the bank's assets today. JPMorgan Chase is apt to pluck the shiniest apple, WaMu's thriving retail bank.

It's not a good day for a bank when the Seattle Times story on the crater your stock fell into begins like this:

Your money is safe if its in an institution insured by the FDIC. The Federal Deposit Insurance Corp. covers up to $100,000 per institution, and even may provide additional coverage for IRAs in those banks.