It may be the largest bank or thrift failure ever in U.S. history, but the federal seizure of Washington Mutual's bank operations and their transfer to JP Morgan Chase & Co. is not expected to have much negative impact in Los Angeles. It could even turn out to be an overall plus.
Chase Bank, the retail banking arm of JP Morgan Chase, has no bank branches in L.A. County, so when it absorbs Washington Mutual's nearly 200 L.A. branches over the next several months, few if any closings or layoffs are expected.
"One of the big attractions of this purchase was WaMu's California bank branches," said JP Morgan Chase spokesman Tom Kelly.
Washington Mutual does have administrative offices in the Los Angeles area that house commercial real estate loan centers and regional supervisors. The fate of these offices was unclear as of late Friday. One issue was whether these operations are considered non-bank subsidiaries that were exempted from the deal and therefore were not purchased.
However, over the last two years Washington Mutual had scaled back its mortgage loan processing operations in the region, selling some of them off or closing them entirely, so there's little left to cut in that area.
With few cuts expected, the deal could turn into a positive for the Los Angeles region. Washington Mutual was the county's second largest depository institution at the time of its seizure.
"For months now, the fate of WaMu and all its branches here has been very much up in the air," said Wade Francis, president of Unicon Financial Services in Long Beach, a banking consulting firm. "This deal will add stability to the Los Angeles banking scene as one of the strongest and best-run banks in the country now becomes the second largest player here."
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