Courtney Sargent, Deseret News
Cars line up at the drive-through of the Washington Mutual on Foothill Drive in Salt Lake City on Friday. Access to accounts and bank branches is unchanged.

NEW YORK — The collapse of Washington Mutual Inc. left customers and investors with many concerns and questions in the wake of the nation's biggest bank failure.

Succumbing to problems in its home-loan business that have been evident since 2006, WaMu was seized Thursday by the Federal Deposit Insurance Corp., which then sold the thrift's banking assets to JPMorgan Chase & Co. for $1.9 billion.

The news surprised some Salt Lake City customers, though they said business went on as usual in a downtown branch. Still, some were nervous.

Salt Lake City resident David Gravelle went inside the bank Friday instead of going to the ATM to get a feel for what's going on. He wishes information were more forthcoming from the company, particularly considering the nation's financial crisis. He's withholding judgment whether to move his money elsewhere.

So is customer Diane Hill.

"I think our money's safe," she said, acknowledging she was thinking about moving accounts elsewhere. "But everything's pretty unnerving this week."

Question: What does the sale mean for customers?

Answer: JPMorgan Chase assured customers on both the WaMu Web site and its own that it's business as usual after it assumed the deposit and loan accounts, and all branches of Washington Mutual. "You can continue to access your accounts just the way you've accessed them in the past: Use your same branch, same debit, credit and ATM cards, same checks."

FDIC Chairman Sheila Bair also promised customers a seamless transition. For all depositors and other customers of WaMu, "this is simply a combination of two banks," she said.

Utah is home to 33 Chase branches and 18 WaMu branches, said Howard Headlee, president of the Utah Bankers Association.

"Combining those are not going to create any kind of competitive issue," Headlee said. If branches were to consolidate, "it wouldn't happen for a number of months."

Question: How safe is WaMu customers' money?

Answer: "No one lost any money that was deposited in Washington Mutual Bank," the FDIC said. FDIC insurance protects deposits up to $100,000, or $250,000 for some individual retirement accounts and 401(k)s. But that insurance should not be needed if the JPMorgan takeover proceeds smoothly. The purchase prevents WaMu's collapse from depleting the FDIC's insurance fund, which stood at $45 billion on Thursday.

JPMorgan bought WaMu's assets, which are valued at about $307 billion, for $1.9 billion. Now the nation's second largest bank, JPMorgan plans to write down about $31 billion worth of bad loans and sell $8 billion in common stock to raise capital.

Question: What about WaMu investors?

Answer: The news is much worse. Stockholders, who had already seen shares plunge 95 percent since their October high of $36.47, have the lowest priority for claims against WaMu. "Equity investors generally get the short end of the stick on these kinds of things," said "Stock Trader's Almanac" author and publisher Jeff Hirsch. "The company goes belly up, you lose."

Investors who hold senior notes or other debt will be notified by the FDIC as to their treatment as claimants of the receivership.

Question: Do direct deposit, automated payments, transfers remain the same? What about credit card and loan payments?

Answer: JPMorgan Chase says all those services will continue without interruption or change. Payment instructions and addresses remain the same.

Question: If customers have deposit accounts at both WaMu and Chase, are both insured?

Answer: Yes. FDIC regulations say deposits at WaMu that transferred to Chase will be separately insured from any accounts at Chase for at least six months after the sale. CDs from WaMu are separately insured until the earliest maturity date after the six-month period.

Question: When can WaMu customers bank at Chase bank branches?

Answer: Not yet, according to JPMorgan Chase, which will need some time to get the two systems combined.

Question: Can existing Chase bank customers make credit card, car loan or mortgage payments at a WaMu branch now?

Answer: No. JPMorgan Chase says the date for that isn't yet known.

Question: How big will JPMorgan Chase be now?

Answer: JPMorgan Chase, which also bought the investment bank Bear Stearns Cos. for about $1.4 billion in March, now trails only Bank of America Corp. in assets. For customers, it now has over 5,400 branches and 14,000 ATMs in 23 states.


Contributing: Jennifer Toomer-Cook