JP Morgan Chase to swallow WaMu

The Wall Street Journal is reporting tonight that Washington Mutual will be sold to financial services giant JP Morgan Chase in a deal brokered by the federal government, which seized control of the thrift.

UPDATE, 6:15 PM: Federal regulators have confirmed the sale:

In what is by far the largest bank failure in U.S. history, federal regulators seized Washington Mutual Inc. and struck a deal to sell the bulk of its operations to J.P. Morgan Chase & Co.

The closing represents the demise of what once was the largest U.S. thrift but came to symbolize many of the worst excesses of the mortgage boom. Federal regulators said WaMu has suffered an exodus of $16.7 billion in deposits since Sept. 15, leaving the Seattle thrift "with insufficient liquidity to meet its obligations." As a result, WaMu was in "an unsafe and unsound condition to transact business," according to the Office of Thrift Supervision.

If the sale goes through, Washington Mutual branches throughout the Pacific Northwest will become part of Chase Bank, and some Washington Mutual employees working in downtown Seattle will likely be laid off.

UPDATE, 7:05 PM: JPMorgan Chase has confirmed its plans for Washington Mutual.

JPMorgan said it is adding branches in California, Washington and Florida and will have 5,400 offices with about $900 billion in deposits, the most of any U.S. bank. The branches will carry the Chase brand and will be integrated by 20, JPMorgan said.

If you bank at Washington Mutual and would prefer not to become a Chase customer, we urge you to start thinking about joining a credit union, as Seattle P-I commenter MizStery did earlier today:

I opened an account at Washington Mutual in 1971 while a student at the UW. I always have been treated well by the folks at WM. Today, Thursday Sept 25th, 2008 at 9:30 am,I pulled out my savings and put it into the Boeing [Employees] Credit Union. I called my sister to advise her of my plans, she said I never thought I would see this day. All I could do is sadly agree.

The great thing about credit unions is that they are owned by their members. Since every customer is a shareholder, credit unions can focus on providing superior service to Main Street - and not have to worry about Wall Street.

A number of terrific credit unions have a strong presence in the Pacific Northwest. For those looking to move their money out of WaMu and into a friendly nonprofit financial cooperative, here are a few choices:

• BECU (Boeing Employees Credit Union): The nation's fourth largest credit union, known for its innovation and willingness to help striking union members. Membership is open to all Washingtonians. Almost all of its branches are located in Puget Sound.
• Watermark Credit Union (formerly Seattle Telco): Another well established local credit union centered in the Seattle area with a great reputation. Membership is open to all Washingtonians.
• First Tech Credit Union: Originally founded by employees of Tektronix. Membership is open to residents of Lane County, Oregon, people who work for the State of Oregon, or Washingtonians and Oregonians working in the high tech sector for companies like Microsoft.
• Global Credit Union (originally Fairchild Federal): Founded in the 1950s, Global is an excellent choice for residents in the Spokane area or the Tri-Cities.
• School Employees Credit Union of Washington: Open to Washington teachers, education support professionals, university faculty, librarians, and their family members. An outstanding option for those who are eligible.
• QualStar Credit Union (formerly Safeway Seattle Employees’ Federal): Another good choice for residents of the Seattle metro area. Membership is open to all Washingtonians.

This is a very short list. You can easily find a comprehensive list of credit unions that you are eligible to join at FindACreditUnion.com (requires Adobe Flash player).