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Sign of the Times: New "What If's?" to Ponder

September 11th, 2008 at 08:33 am

Here are 2 "What If's?" I pondered yesterday that never would have crossed my mind even 6 months ago:

1. "What if WaMu fails while DH is overseas on one of his month-long business trips, like the one he's getting ready to go on? Will I have to wait until he gets back to recoup all of the money in our joint account? Should I have him sign some sort of PofA?" (Conclusion: Needless worry, silly nilly. According to the FDIC, when a bank fails and is not taken over, the FDIC sends account holders a check. If it's a joint account, the account balance is divided in 2 and checks are sent to both account holders. I have never had a problem depositing a check made out to DH, as long as I'm not asking for cash back or opening a new account. So ... I'll just take his check and deposit it in one of our other bank accounts.)

2. "What if WaMu fails this Friday? If I pay my quarterly estimated taxes to the IRS (due Sept. 15th) with my WaMu checking account, and the check gets sent back, will the IRS assess me interest and penalties? (Conclusion: Yea, this one has the potential to be a problem. But odds are pretty slim. When a bank is closed and not taken over, checks that have not cleared do get sent back marked "Bank Closed." Obviously, I'd need to send new payment to the IRS. But in spite of their bad rep, I have actually found the IRS to be pretty understanding when it comes to "unusual circumstances." If WaMu failed, that would not exactly be a secret; the folks at the IRS would know about it! Since paying the estimated taxes from a different bank account would have required a fair amount of money shuffling, I decided to go ahead and just pay using the WaMu check, and if need be I will throw myself on the mercy of the IRS and ask for an interest & penalty waiver.)

Is there anyone else out there who has not closed their WaMu account? (There probably aren't many of us. I went in to my branch last Friday afternoon to make a deposit. Normally Friday afternoons are busy at any bank with people cashing their paychecks. I was the only person in the branch the entire time.) If so, any odd questions like mine crossing your mind these days?

9 Responses to “Sign of the Times: New "What If's?" to Ponder”

  1. Broken Arrow Says:

    Hmm, yeah, sobering thoughts indeed. I've tried to think of something comforting to say to ease your mind. Unfortunately, I'm not sure what to make of it either. There are no major players I am aware of that is interested in acquiring WaMu (again, that I am aware of), and Sovereign Wealth Funds are not charging in to save the day this time. Everybody is scrambling for a capital infusion, but the well is already drying up....

    For what it's worth, they have a pretty large regular deposit base, and I think that is doing well enough. So the core business is intact. I don't think WaMu will collapse. I'm not sure, but I don't think so.

    But yeah, there's always FDIC.

  2. monkeymama Says:

    Interesting.

    Actually, our CU is on pretty steady ground (no shady loans) BUT they did just buy out a struggling CU with lots of bad loans. I hope it pans out. Can't say I am thrilled - though so far it seems they have been rather cautious and doing rather well. (I can't say the same for GMAC but I don't keep money I need in the near future in there).

    Anyway, BM's school was looking for volunteers to organize a savings program. Though I would love to be involved, I am not up to organizing at this point. I realized yesterday they had a table set up at the school and the savings accounts were for WAMU. I turned to dh and said if I was in charge I would have contracted with the credit union, thinking more of fees and such. (The CU is very large and very convenient - though admittedly WAMU is within walking distance, down the street - probably why they picked them). But then of course I thought to their current struggles.

    Maybe the kids will get a lesson in FDIC insurance - hmmm...

  3. Aleta Says:

    Yes, I think like you to the what if's. I had a CD with WaMu that matured in August that made me squirm. My came due on a Friday. I thought what if I cash out, take the check to the other bank and it would close that day before my check could clear in the other bank.

    We have to pay estmated taxes too so I can understand your concern there. I am keeping tax money in a bank that has a 3 rating. I just feel better doing that because it is a money market and I can write 3 checks and transfer money out. You might want to think about that for the important bills coming due.

  4. scfr Says:

    Glad to know I'm not the only one who ponders these things. Aleta - I would have been squirming about moving a large amount with a WaMu check on a Friday too.

    I'm not going to close my WaMu account; we have our money spread around among a few banks so I know we'll be fine in case of a failure. (Also, I still have confidence in the FDIC.) The value of "what if" thinking is to think it through and decide if you can live with the worst case scenario. So far I can ... except for the IRS business. I will NOT pay my estimated taxes from my WaMu account again. I already have a note on my calendar for a week before I pay my January estimated taxes, reminding me to move funds if necessary.

    MonkeyMama - I agree with you. I would not have chosen WaMu for a kiddie saving program!

    Oh, but looking on the bright side if it does fail ... I will have plenty to blog about! (I promise to provide all the boring details, as I'm sure many of us are interested in what a customer goes through after a bank closure.)

  5. PauletteGoddard Says:

    My child hasn't yet closed his School Savings account. I feel like taking him on a field trip on Saturday ("honey, this is what is called a bank run. After you get your money out you can treat your mommy to a donut and a cappuccino.") I chose not to continue the School Savings volunteer position this year as I had worked at WaMu on a contract earlier and sensed it was not long for this world as an independent entity.

  6. scfr Says:

    It's sad ... I've banked with WaMu off & on for many years, and many fine people work there. They just can't seem to catch a break. I hope they can turn things around, but at this point, with all of the bad news coming out, the outcome seems almost inevitable.

    We bailed on IndyMac Bank (closed our account) about a year before it failed, but we've decided to just hang tough with WaMu.

    Well ... I just checked my accounts (checking & MMA) on-line and got my registers balanced (not something I normally do until the end of the month). Interest payments posted on the 10th. I have only 2 checks outstanding.

    I hereby swear in front of all my SA friends that IF WaMu fails, I will N-O-T go stand in line outside of a branch. I understand that people do it because they feel a need to do something, but I also know it's a waste of time. I will patiently wait for the FDIC to mail me my checks. All I will do is call the IRS and xxx (the payee on the other outstanding check), to arrange alternate payment, and then I will start rate shopping to figure out where I will deposit my WaMu money.

  7. baselle Says:

    I also have my money spread around to a few other banks. I just have my personal checking, direct deposit, and small amount of savings in WaMu. Its about $1500 all told. I should take out a little bit for the weekend - if FDIC takes them over they'll do it on a Friday or Saturday. The worst for me right now would be that our accounts would be frozen over the weekend.

    If WaMu goes, I say if you are going to fail, fail early while FDIC can still cover it. Just like if you are going to panic, panic first while you can still see the exit.

    And I promise to take pictures of the bank run. Big Grin I'm trying to figure out whether the WaMu Tower or the WaMu Center will have the bigger one.

  8. frugaltexan75 Says:

    I have a checking account at WAMU but it doesn't have anything in it right now. However, my MyPoints credit card is through WAMU. Anyone know what would happen to it if WAMU fails??

  9. scfr Says:

    frugaltexan - I'm sorry ... I have no idea. Might be a good question to post on the forums.

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