Monday, September 29, 2008

700 billion as economy sinks and WaMu goes down. What's next?

As Congress struggles to fix the biggest financial crisis since the Great Depression with a 700 billion bailout plan for Wall Street, people like myself on Main Street wonder what's the deal with my bank WaMu? I'm a WaMu customer and I didn't know what to think about the banks recent collapse, especially when our economy is in a such a mess.

Last week Washington Mutual collapsed under the weight of its huge bad debts on the mortgage market and the Federal Deposit Insurance Corp. seized WaMu and sold the bank to JP Morgan Chase & Co. for 1.9 billion. Great! What the heck does that exactly mean, I thought?

So now what? I wondered. Should I cancel my account and withdraw the little amount of my money in the bank? Is it too late now? Should I be worried? Should I open a new account elsewhere? What about my direct deposits? Sheesh, imagine all the paper work I thought. Would I need a new debit card? Maybe I should put all my money under my mattress like the old times. Remember that? I'm sure people still do it, people who don't trust banks. Maybe they have the right idea.

Shortly after Chase bought WaMu a memo was sent to all customers saying our checking accounts, savings accounts and certificates of deposits - "are now backed by the strength and security of JP Morgan Chase," the largest depository bank in America.

Everything remains the same including same account numbers, same WaMu name on the holders account, same checks, debit cards, credit cards, deposit slips, same online banking and passwords, and same branches and ATMs.

The memo added that "soon" I'll be able to use Chase's ATMs free of charge. (I should have read the entire memo before I withdrew money this past weekend from a Chase ATM and I was still charged a three dollar fee. Three dollars! Go figure! I wonder if I'll get that back in the future?)

The memo added that soon I'll begin to see the Chase name on my statements, online and on reissued credit cards. The bank locations will eventually be renamed Chase and I'll be reissued a new debit card with the Chase name, but until then I should bank as usual. Sometime next year I'll be able to use the actual Chase banks.

WaMu, which was founded in 1889 is the largest bank to fail by far in U.S. history.

I guess for now I don't have to worry but given all the problems with rising unemployment rates, massive foreclosures, rising student loan debts and a Republican administration that puts Wall Street and major profit-before-people driven corporations, including banks first, I wonder whats next?

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