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Posted To: Pipeline Press

I should have listened to my Mom and become a lawyer! Back in 2008, as WaMu was collapsing, the FDIC brokered a transaction between the failing S&L and J.P. Morgan Chase. But the question has now arisen: “Who should cover billions of dollars from a legal mess that WaMu left behind?” The FDIC took them over, and then JPMChase bought it for $1.9 billion within 2 days – but the deal left open who exactly should cover WaMu’s liabilities. (Isn’t that covered somewhere in law school?) Chase’s position is that it agreed only to take on bank liabilities that were spelled out on WaMu’s books during the handoff – which did not include the cost of the lawsuits. The FDIC, supported by bank contributions or the taxpayer, depending on who you ask, has said J.P. Morgan agreed to buy the bank, both the…(read more)

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