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Will WaMu customers accept Chase?

In one respect, Washington Mutual (WaMu) customers who have uninsured deposits, and the FDIC, should be breathing a big sigh of relief. JP Morgan Chase agreed to accept those uninsured deposits in its buyout of the nation's biggest thrift -- the biggest banking failure in U.S. history.

"You're never happy to see a bank fail, but you couldn't expect a better outcome for a bank of this size to be closed and it not costing the FDIC any money," says FDIC spokesman David Barr. "But again, you're never happy when a bank fails; particularly one this size that touches so many people's lives."

Some WaMu customers may have hoped the crippled institution could hold on until the bailout, but too many of them were emptying their deposit accounts. The final blow came Thursday.

"Their credit got downgraded again yesterday," says Robert Ellis, senior vice president of the wealth management group at financial consulting firm Celent.

"One of the lessons we've learned -- again -- in this country is you can't borrow short-term to fund long-term assets. When their credit gets downgraded, people aren't going to lend them money in the short term, and they didn't have sufficient long-term financing lined up. It's the same story time and time again. Short-term borrowing can kill you when you're lending long."

So, now that WaMu is well on its way to the crowded graveyard of failed financial institutions, its customers have to be wondering if they'll like being a customer of JP Morgan Chase.

Chase is the retail banking operation of JP Morgan Chase, and the fast, smooth takeover could mean that the transition -- which will take months to complete -- will be as seamless as possible for customers.

"The initial reaction has been, 'Whew!'" says Chase spokesman Tom Kelly. "I think people are relieved. There's been a lot of attention to WaMu's challenges, and I think this is a big sigh of relief for people. The transition will take time, but we're very interested in making sure it goes very well. This is a big investment for us, and we want to keep those customers and do more business with them."

The acquisition means Chase will have more than 5,400 branches and 14,000 ATMs in 23 states.

Keeping the account status quo

For now, WaMu customers will keep their same account numbers and use their WaMu checks, debit cards, credit cards and deposit slips. Eventually, you'll see the Chase name added to checks, credit cards and the like as they're reissued.

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Online banking, user names and passwords will also stay as is. Direct deposits, automated payments and transfers should continue uninterrupted.

Customers with Chase credit cards, loans or mortgage payments should continue to make them at Chase branches. If you have deposit accounts at both banks, the accounts will be kept separate and remain separately insured for an estimated six months.

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