Chase Getting Rid of WAMU Customers?

Chase has taken an interesting approach with it’s WAMU customers.  They are just getting rid of many of them.  Last fall, they made uncompetitive the previously successful WAMU Online Savings account.  This makes sense if you are Chase and have a low cost of funds, but customers did go elsewhere.  Last summer, many lenders like WAMU and Chase started cutting back Home Equity Lines to reduce their exposure to declining real estate values.  This too was understandable and customers really had no where else to go.

Fast forward to April 2009, the Chase marketing department is spending a lot of resources on bringing WAMU customers into the fold and making it’s long awaited big debut in California.  But the loan department is now unilaterally suspending some of the home equity accounts of WAMU customers. Chase has begun notifying customers of the suspensions, claiming further declines in property value as the reason for the action.  Interestingly,  they have taken this action even where there is plenty of equity in homes and no outstanding balance on the equity lines.  This is really a hatchet approach when a scalpel is much more appropriate.  Interesting message to it’s new California and WAMU customers, welcome to Chase, we are one of the strongest and oldest banks, we don’t have competitive savings rates, we don’t have money to lend regardless of the equity in your house, but we’ll give you $100 to open a checking account

Why do I mention this?  First, it’s important to reiterate that if you have any line of credit at any bank that you are relying upon (home equity (HELOC), personal line, business line) you should be careful.  Banks can decrease, suspend and cancel your account.  They will let you know after the fact.  This has been happening a lot in the past year and has put many people and businesses in a bind.  You really need to make sure the money is accessible on your line of credit before writing any checks or trying to use a charge card tied to the credit line.

Second, this raises many questions about Chase and the other large banks.  Are they really in such bad shape at this point in time that they need to take these drastic actions?  Is this in response to government demands?  Is the government micromanaging these banks?  Are these mega banks capable of being responsive to individual customers?  Do the banking decision makers in New York and Charlotte (and Washington, D.C.) understand the impact they have on people with their actions? 

The taxpayer is on the hook for some of the WAMU loans.  Maybe this move may be bad for WAMU customers, but ultimately a good thing for taxpayers.  Maybe Chase is a good bank, but just in a difficult situation.  I don’t know.  If you have any experience with this situation or thoughts on the questions I raise, please share in the comments below.

16 thoughts on “Chase Getting Rid of WAMU Customers?”

  1. I wish I could say that your experience is not part of the standard operating procedures for banks like Chase and WaMu. I’ve been tracking WaMu’s bad behavior for several years now as the editor of the site, a site I created in response to my own bad experience with WaMu. What I have seen over that time is a culture of insensitivity to customer needs, rules that are specifically engineered to generate fees at the customers expense, and specifically in WaMu’s case, a gross level of incompetence that seemed to get worse and worse and their crisis progressed. The responses of WaMu and Chase to the credit/banking crisis has been things like raising credit card rates on customers with perfect credit scores, or closing credit accounts altogether when not deserved. One problem is that banking, rather than being a personalized service where the banker knows the customer, has become a game of numbers, but many of the numbers (like rules for fees) are not realistic or customer friendly, or, such as the numbers that permitted all the toxic mortgages to undeserving customers, were just downright wrong. The numbers game continues as Chase starts to close home equity lines on a mass scale on many people that would probably turn out to be pretty good customers. I had hoped that being bought by Chase would turn out to be a better thing for WaMu, but Chase seems to be much the same type of organization that WaMu is/was. Shame.

  2. This just happened to me. I have 800 credit scores and never a late payment but was dumb enough to pull 100K (inheritance) out of savings and put on equity line thinking that it made more sense to not be paying interest on that equity line. I figured if I had an emergency, I still had the equity line. Well, now the equity line has been reduced to 5K over the balance and I don’t have my savings to fall back on in emergency….seems illegal to change the terms of the loan like that when there have been no lates or anything. Anyway beware, what was once the recommended way to handle your debt doesn’t hold true anymore. Hold on t o your cash! WAMU/CHASE just made my life harder….by far.

  3. We just got our letter today. $100k credit line cut to $16,300 because “our property value dropped more than 5% of the value appraised when the loan originated” (a whopping 2% more, according to the CS rep I spoke with).

    This is in spite of the fact that Chase (who I now hate with a passion) agrees that it’s underwriters confirm our current property value at $466k, while we only owe Chase $280k (which means that we should still have $186k in equity!). And nothing in our financial circumstances has changed to indicate that we might be an increased risk to Chase.

    I knew Chase would screw over WaMu customers when they took it over. I’m so mad I could just spit!

  4. Oh, and BTW, I’m pretty convinced that in our case, Chase has violated the Truth In Lending Act, Regulation Z. So after two fruitless and annoying calls to the bank, I’ve now put it in the hands of my lawyer. Anyone for a class action against Chase?

  5. Update:

    Having now found our copies of the docs for our 2003 refi, I don’t see the same valuation at origination that Chase is claiming for our home. They are claiming $502k, I see $470k. An innocent error, or something more sinister?

    $470k is only a 1% change in value from the $466k valuation they are now getting from their underwriters. At this valuation, under Chase’s own arbitrary threshold, we should have never been a target for this kind of reduction.

    Naturally, I’ve demanded copies of the original, signed, loan docs. I want to see this supposed $502k valuation, in writing and with our signatures attached to it.

    In addition, I have now filed complaints with the OCC and the FDIC.

    Many people would say to just let this go and get a new HELOC with someone else. But I’m not that kind of guy. Aside from pissing me off Royaly, I have concerns about what the reduction in available credit will do to our credit scores and worthiness profile.

  6. $700k house (Chase’s number but it’s actually $750k), $250k first mortgage with Chase, perfect credit, HELOC cut to ZERO

    They had no explanation when I called and wouldn’t bump it to even $1 unless I paid for an expensive appraisal. Unbelievable.

  7. There is no way I will go with CHASE.

    Why would I do that if I know from the past experiences with them – that they stole so much money from me!

    They sent me a check for $100 to open account with them, I did not fall for it.
    Would never do it no matter how much they offer. The stress and pain they cause by taking the money out of your account whenever it suites them is — unexplainable.
    It is 5/8/2009 and I am shopping for another checking account with some other non-stealing bank.

    Wamu was wonderful. The best bank ever! They took care of me… they were consistent and always looked what is best in my interest. I had a manager in my location who would alert me by calling me to add the cash BEFORE he would charge me any fee. I don’t remember when did I pay any fees with WAMU.

    CHASE was just the opposite…… they did everything to take as much money from you at all times.

    I had accounts with other banks and CHASE took over so I —- stupid —- stayed with CHASE believing they will take care of customers.

    OMG what kind of things I experienced with them, it is undescribable.
    Never ever again I will put myself through that pain, ever again!

    So I finally closed all my CHASE accounts 2 years ago and went with WAMU – and will never repeat that horrible experience.

    Why would I allow them to use my money to get richer while they slam me with fees and always managed to go around it ( no rules )… so you end up paying and they end up re-inventing another excuse for taking another $30 fee from your hard working money!

    Never in my life would I give them a chance to use me that way again!!
    People please come to your senses. CHASE is the worst bank you can have business with. Do not help them by staying, I wish WAMU survived and CHASE vanished!!!
    WAMU deserved to be of service to us. It was great bank.

    Sincerely — you would be insane to go with CHASE. There must be another non-stealing bank to pick from!!!

    By not staying with them CHASE will have no choice but to either change their stealing habits or they will vanish.

    This is our moral duty… not to help stealing banks to use us to get richer.
    But to give a chance to smaller banks like WAMU to survive and carry on the good work and great service.

  8. I loved WAMU before the takeover by Chase! Best bank I ever banked with. 3 years and no complaints whatsoever. VERY good bankers at my local branch: friendly, fast, intelligent, problem solvers…everything you could want in a banker. And then in April, Chase suddenly and without good cause canceled my business line of credit. We have very good credit (business and personal), decent deposits for a small family business (over $350K a year), responsible use of our line of credit (1x in 2 years; repaid quickly). I guess I should consider myself somewhat lucky… my 2 credit cards from them are relatively untouched… my WAMU card went from 9.99% to 10.24% (at the takeover) and my Chase card had it’s limit raised in January and still remains the same decent rate of 8.99%… so far. I want to switch my bank accounts to a smaller, local bank that will give my business a new line of credit, but I’m afraid if I do, Chase will retaliate with my credit card rates/limits. Grrrrrr.

  9. My wife and I were very happy with Wamu for several years. We don’t have a lot of assets so our relationship with our bank is fairly simple. At the worst, we only make mistakes with our free checking account about once a year, if that.

    We raised our eyebrows at the Chase buyout but were willing to give it a chance. It has been a month or so now that we’ve been using the Chase online services to do our banking and have noticed a lot of little changes that weren’t really made clear.

    Firstly, when it was Wamu I was always a little comforted by the account facts section that stated we had a free overdraft. I can think of once that we have actually used it, but I’ve always liked seeing it there. It made me feel valued. I can find no mention whatsoever of that feature now on the Chase site.

    Also I notice that debits don’t post immediately to the pending balance, whereas with Wamu they never failed to show up the moment they were made.

    I have no interest in speaking with Chase about these, compared to other’s complaints, small problems with the buyout. But I thought it interesting to mention that Chase is making no real effort to retain ANY customer, regardless of income or holdings.

    This will be our last month with Chase.

  10. I went to Wamu because of their Customer Service and Human Touch… Chase is the complete opposite. Why they even bother having a customer service for the life of me I don’t know!!! A computer can tell me with more efficiency to pay my fee’s shut up and were not going to listen to you anyway. It also saves me the indignities of having someone tell me “I’m sorry for the misunderstanding, but theirs nothing we can do about this”… and it was their fault!!! Their sending me a chase bill for a Washington Mutual Credit card. My wife thought it was Junk Mail!!! and best yet with my credit score at 767 they decided to reduce my credit line to just above what I owed!!! and raise my interest rate from 12% to 17.9%. I taught them… I know how banks work… I took all my money out of their banks. and as soon as I get my 7% credit card from Astoria Federal… their complete history!!!


  12. Chase is putting customer personal accounts into business accounts. Why?

    I had a personal CD and Chase put it under a business account and told me that this was the only way it could be done. Something is reeeally wrong with this picture. Why?

  13. Chase needs to be taken over by the government, they could not manage it worse than JPM Chase does.

    I closed my WAMU account after 25 years due to their poor accounting practices. I am closing my credit card and trying to refi out of the Chase loan that were Ohio and WAMU transfers.

    They lack customer service but why should they care, we the citizens are paying for their bailout and we gave them $0.50 on the dollar assets like WAMU loans. They can afford to abuse us and pay out big $2M salary and bonuses. Gods bless America.

  14. I had a HELOC with Wamu for years. I was in the middle of a modification, when California was transitioning over to CHASE (in October, 2009). Although my modified payments were being deducted out of my Wamu acct., it stoped in October, 2009. I called to inquire and was told that it was because of the transition that my acct. could not be located and that I should call at the end of October. When I called back a few weeks later (as they requested), I was informed that my acct. had been charged-off. No, letter, no reason. I have spent the last 1.5 years trying to have Chase rectify their mistake. No one can help… they don’t even have an acct. number to view my old acct. What can I do????? I have attempted to speak to anyone that will listen and still no results!!!!!!!!

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