Friday was a grim day for Washington Mutual Inc. shareholders, bondholders and employees, as they woke up to find the thrift had been seized and sold to J.P. Morgan Chase & Co. No more WaMu. It turns out, however, that there is some levity in the bank seizure business, to judge by a collection of war stories on the Federal Deposit Insurance Corp.'s Web site.
Continue reading below
As part of a study of the S&L bailouts of prior decades, the FDIC staff contributed anecdotes from that era.
In one 1984 case, after scooping up all the cash and removing it from a Southern California institution, FDIC employees manned the tellers' wickets to write checks to depositors. Unaware of the bank's fate, a crook burst in and demanded that an FDIC "teller" hand over cash. After having it explained to him that there wasn't any, he beat a hasty retreat.
Another story involves the Vernon Savings & Loan in Texas, which was taken over in March 1987 by the Federal Savings & Loan Insurance Corp. (later rolled into FDIC). FSLIC teams try to slip into town quietly, as they did this time, booking rooms under a phony corporate name to avoid setting off alarms. When they showed up at this S&L, however, they were greeted by a cake that read, "Welcome FSLIC." The employees had been placing bets on which Friday the Feds would arrive. - John E. Morris
