About Washington Mutual Corporation
Washington Mutual--WaMu--was originally a bank based in Seattle, Washington, that for more than one hundred years expanded by acquisition of other banks and financial concerns to become the biggest savings and loan institution in the United States. In 2008, federal regulators seized WaMu's assets and sold them to the J.P. Morgan Chase corporation in order to avert the necessity for a large taxpayer bailout of the failing institution.
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History
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Washington National Building Loan and Investment Association made the first installment mortgage loan on the west coast in 1890. Founded in 1889, the company changed its name to Washington Mutual Savings Bank in 1917. In the 1980s WaMu became a public corporation, and in the 1990s it acquired 16 smaller banks in the west as well as Great Western Financial, H.F. Ahmanson, and Long Beach Financial, a sub-prime mortgage lender. Early in the 21st century WaMu acquired Dime Bancorp and Fleet Mortgage as well as Providian Financial, a credit card company. WaMu first signaled difficulties with a massive layoff of employees in 2006, and by 2008 reported a loss of $3.3 billion in the second quarter.
Features
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WaMu pioneered a precursor to ATMs in 1974. WaMu was an industry leader, introducing many innovations beginning with its first installment loan in 1890. During the Great Depression of the 1930s, WaMu arranged one of the first bank bailouts, purchasing the distressed Continental Mutual Savings Bank. In the 1970s, it helped to create the first cash machine network in the United States, a forerunner of ATMs, known as The Exchange. In 1999, when WaMu bought Long Beach Financial, Washington Mutual CEO Kerry Killinger explained that the corporation's strategy was to lead the nation's consumer-oriented financial services institutions.
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Geography
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As of 2006, Washington Mutual had over 2,600 locations offering services that ranged from retail banking to mortgage lending. These were located in 36 states throughout the country. When Chase acquired the corporation, it retained many of these locations.
Assets
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According to Fortune magazine's annual ranking of America's largest corporations in 2006, Washington Mutual ranked 99th among U.S. corporations and first among U.S. savings institutions, with assets of nearly $344 billion. WaMu profits for 2006 were up 19 percent from the previous year, topping out at $3.4 billion. After its seizure of WaMu assets in 2008, the government sold them to J.P. Morgan Chase for $1.9 billion.
Expert Insight
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A Senate subcommittee looked into the Washington Mutual Bank failure. According to the U.S. Senate Permanent Subcommittee on Investigation that looked into this biggest bank failure in history, Washington Mutual used "a toxic mix of high risk lending, lax controls, and destructive compensation practices" to flood the market with "shoddy loans and securities that went bad." Committee chairman Carl Levin "said he hopes the subcommittee's findings will give a boost to strong regulatory reforms through a robust consumer protection agency."
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References
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