Washington Mutual takeover raises concerns - East Valley Tribune: Business

Washington Mutual takeover raises concerns

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Posted: Friday, September 26, 2008 6:17 pm | Updated: 10:13 pm, Fri Oct 7, 2011.

The collapse of Washington Mutual may be the largest bank failure in U.S. history, but federal regulators are advising customers to stay calm and asserting that business will go on as usual.

JPMorgan Chase buys WaMu assets after FDIC seizure

Federal Deposit Insurance Corp. chairman Sheila C. Bair issued a statement Friday informing WaMu customers that their bank accounts and home loans were taken over by JPMorgan Chase late Thursday in "a seamless transition."

"For all depositors and other customers of Washington Mutual Bank, this is simply a combination of two banks," Bair said. "There will be no interruption in services, and bank customers should expect business as usual."

But some East Valley customers aren't so sure.

Mesa newlyweds Terry and Kathy Deever went to their WaMu branch Friday at 28 S. Dobson Road in Mesa concerned about the status of the bank.

"With a big merger like that, I'm afraid things might go wrong," said Terry, 26. "Just because I know what's going on - the paperwork, transferring documents - something might get lost. With any transition, information is easily buried."

To quell these concerns, JP-Morgan posted a statement on both banks' Web sites assuring WaMu customers that they can remain confident in their deposit and loan accounts.

"You can continue to access your accounts the way you've accessed them in the past: use your same branch, same debit, credit and ATM cards, same checks," the statement said.

Despite the promises, Tim Ramos of Mesa wasn't convinced.

Ramos, 21, went to the Dobson location and said he didn't feel confident enough to stay with WaMu. He planned to close his direct deposit account.

"I don't want to wait to see what happens next," he said.

While WaMu customers feel shaky about what will happen in the coming weeks, the future of WaMu's employees also is uncertain.

JPMorgan and WaMu officials did not reply to inquiries about possible staff cutbacks or branch closures.

JPMorgan leads all banks in Arizona in deposits, taking in more than $19 billion, according the most recent numbers available from the FDIC. It had 223 branches in Arizona prior to themerger.

With almost 24 percent of the market share, JPMorgan had nearly $4 billion more in deposits than its nearest competitor, Bank of America.

WaMu also had a healthy presence in Arizona, holding more than $1 billion in deposits and accounting for nearly 1.5 percent of the market. It had 65 branches in the state.

Connie Schultz, 62, of Tempe feels that WaMu has a strong foundation now that JPMorgan stepped in, but the shifting financial markets have her a little nervous.

"The economic situation is very uncertain and very scary," she said. "But as far as Washington Mutual is concerned, I'll stay with them ... for now."

Songwriter Ron Huelskamp of Mesa was standing in line waiting to see the status of his account when the situation inspired him to make up a new song.

"Thanks to Bush and John McCain, our country's going down the drain," he sang in a country-western style. "Gas is up and jobs are down, and everyone's leaving this one-horse town."

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