No panic at WaMu branches

When IndyMac Bank failed in July, panicked customers brought lawn chairs and umbrellas to sit outside the Costa Mesa branch for hours to get their money back as quickly as possible.

The branch shut its front door and let customers in one at a time through a locked back door, while hundreds of people formed a line that snaked around the parking lot.

It was a very different scene Friday afternoon at the three Costa Mesa Washington Mutual branches, following news of the largest bank failure in United States history.

Unfazed customers strolled in, waited in short lines and mostly went about business as usual, the only real difference seeming to be a blue flier saying, “We’re proud to announce that WaMu has become part of one of the nation’s strongest banks; your deposits remain insured by the FDIC and are now also backed by the strength and security of JPMorgan Chase.”

“It’s been pretty quiet, just the usual busy Friday” said Tien Tran, a teller at the branch on Harbor Boulevard at Wilson Street.

Tellers at the other two local branches reported the same thing.

They said there were a few more deposits than usual, but overall no panicked rush.

A few factors could explain the marked difference between the aftermaths of each bank’s failure, said Gary Richardson, a UCI economics professor who is a scholar of the Great Depression. It’s not that area residents are less anxious, though, according to Richardson.

“We didn’t see lines outside, although the pace at which withdrawals occurred was at least as quick with WaMu as it was with IndyMac,” he said. “I have a bunch of friends with WaMu accounts, and they were all asking me if they should withdraw their money.”

IndyMac doesn’t have nearly as many local branches as Washington Mutual. The increased capacity for dealing with customers might have shortened lines, Richardson said.

Also, because it was bought by JPMorgan Chase, one of the nation’s largest financial institutions, Washington Mutual was probably more capable of dealing with huge cash withdrawals than smaller IndyMac. This could have prompted IndyMac to slow down its withdrawal processing intentionally to avoid running out of cash, Richardson said.

Costa Mesa resident Craig Calvert made his usual Friday bank visit to the Washington Mutual branch on Harbor Boulevard to make a deposit and a withdrawal. He’s not worried about the bank’s failure enough to stop doing business with it, although he did move some money to a different bank.

“It’s on my mind, but it might happen to Wells Fargo next,” Calvert said. “You never know.”

ALAN BLANK may be reached at (714) 966-4623 or at [email protected].