Washington Mutual under regulatory scrutiny

Daily news headlines

SEATTLE, WA – Washington Mutual has drawn up a memorandum of understanding with the Office of Thrift Supervision regarding its operations, risk management and compliance – including Bank Secrecy Act compliance. It has agreed to give the US regulator updated business plans and capital, asset quality and earnings forecasts.

Three months ago, the Seattle-based bank and thrift (the US term for a pensions provider or lender) assured investors it was not the subject of regulatory action or in discussions with supervisors. That was in reaction to the announcement of a similar agreement between regulators and Ohio-based bank National City over lending and capital practices.

Washington Mutual revealed the agreement as part of a press release regarding the departure of long-serving chief executive officer Kerry Killinger, who will be replaced by thrift specialist Alan Fishman. In response to reports concerning the bank’s solvency, it has also stated the agreement does not require an increase in capital, the injection of liquidity or changes to its services

On July 22, Washington Mutual announced a second-quarter net loss of $3.33 billion, together with an increase of its loan loss reserves by $3.74 billion to $8.46 billion.