My bank is failing and I don't care

Washington Mutual is in a world of hurt. So what?


Andrew Leonard
September 11, 2008 6:21PM (UTC)

My bank is in trouble. Ask me how much I care.

Washington Mutual is hurting. Shares in the bank fell to a thirty year low on Wednesday, while the cost of insuring against default on WaMu debt rose to a record high. Kerry Killinger, the longtime CEO, is out. Losses attributable to mortgage and credit card loans are hammering the bottom line.

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It's a bad time for banks in general, but Washington Mutual is suffering more than most. Tension must be high at the Seattle headquarters today -- bank stocks were hammered from the opening bell of the New York Stock Exchange, and one more day of investors abandoning ship could be fatal.

Will the bank be sold? Will the Feds step in, again? Could Washington Mutual, gasp, actually fail? Washington Mutual is the third largest mortgage lender and ninth largest credit card company in the U.S. It's been quite awhile since we've seen a bank that size in danger of collapse.

I am, of course, intrigued by the drama. Not only because I have been following the twists and turns of the credit crunch with great interest, but because it's my bank. My checks have Washington Mutual written on them. My paycheck is automatically deposited there. The local branch in downtown Berkeley is where I withdraw the vast majority of my cold, hard cash.

But I really don't care. At all. I certainly don't stand to lose any money -- my assets are well under the limit that the FDIC insures. More to the point, I just have no emotional or intellectual connection to the bank.

Is that strange? This is the institution that handles my money -- without which I would be helpless. How can I stand by and watch the subprime iceberg destroy this mighty institution in slow motion, without even the whisper of a tear itching to run down my cheeks?

One reason: I never asked Washington Mutual to be my bank. 20 years ago, I established a checking account at a bank called Great Western. But in 1997, Washington Mutual snapped up Great Western, as part of the decades-long acquisition binge masterminded by Killinger. I can't say that I had a close, personal intimate relationship with Great Western, but I did feel a connection -- I had made a choice of my own free will to allow that bank to handle my money.

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But I had no choice about becoming a customer of Washington Mutual. (Just as I had no choice about Countrywide swooping in and purchasing my home mortgage from Wells Fargo. Yes, Countrywide -- look upon me, mighty financial institutions that stride the earth like giants, and despair. I am your doom.)

Of course, I could always close my account and take my business elsewhere. Which I never did, because, frankly, it seemed like too much trouble. Besides, the way the banking industry has been consolidating in the United States, whoever I switched to would likely get gobbled up by someone bigger in due course.

So now I watch with bemusement as the bank whose name is a daily, and functionally critical, part of my life, fights for its life. I am curious about what will happen, but I just don't care.

Is there something wrong with that? Shouldn't the important financial relationships in our lives be more meaningful? Shouldn't I feel more invested in my bank's struggle to survive?

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Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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