Bye Bye WaMu: What Bank Acquisitions Mean for Customers

Federal regulators seized Washington Mutual (WM: 0.16*, -1.61, -90.93%) Thursday night in the largest bank failure in U.S. history. J.P. Morgan Chase (JPM: 48.00*, +3.84, +8.69%) immediately took over operations from regulators, paying $1.9 billion for WaMu’s assets.

After Washington Mutual put itself up for sale last week, customers disturbed by news of its shaky financial footing withdrew some $16.7 billion – leaving the bank perilously unsound. J.P. Morgan’s acquisition covers all deposits, which means the FDIC won't need to shell out insurance funds to repay consumers. In purchasing WaMu, J.P. Morgan Chase became the biggest U.S. bank in terms of deposits.

WaMu’s acquisition is just one of many major changes to hit the banking business in these desperate times. Last week, Bank of America (BAC: 36.90*, +2.55, +7.42%) announced it would purchase Merrill Lynch (MER: 27.30*, +1.04, +3.96%), creating the world's largest brokerage when the deal goes through in 2009. And the last big investment banks, Goldman Sachs (GS: 137.45*, +3.12, +2.32%) and Morgan Stanley (MS: 24.64*, -2.31, -8.57%), became bank holding companies to build consumer deposits and avoid Lehman Brothers' bankruptcy fate.