Historic bank closures include the closing of the Home State Savings Bank in 1985 and the 2008 failure of Washington Mutual. The Home State Savings Bank closure was the spark that set off the Savings and Loan crisis of the 1980s.Continue Reading
The savings and loan institutions failed due to the expenses of offering high-yielding deposits to attract customers, exceeding revenues from low-interest loans. When combined with lack of regulation, fraud and questionable practices, this led to their insolvency.
The closing of Washington Mutual, commonly referred to as WaMu, is the nation’s largest bank failure, as of 2015. The U.S. Office of Thrift Supervision seized the bank after a 10-day run in which depositors withdrew $16.9 million. The bank had been suffering losses from mortgages, but had $300 billion in assets and only $8 billion in debt at the time. The Treasury Department and JP Morgan Chase negotiated a deal in which Chase purchased WaMu’s assets and banking operations for $1.9 billion, a price that rocked the financial world and remains controversial.Learn more about Modern History