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Sep 29, 2008 11:40 pm US/Eastern
Wachovia Customers React To Buyout
FORT LAUDERDALE (CBS4) ―
There's concern that the Bailout Bill failure could put even more pressure on an already rattled system. Monday, Citigroup bought out the nation's fourth largest bank, Wachovia. And in these uncertain economic times, many feel insecure.
Citigroup will merge with Wachovia, taking over most of the bank's assets and liabilities. Fathia Hanna is a Wachovia customer who visited her branch to get some answers from bank employees.
"She told me 'everything is okay and your money is insured,'" Hanna described, "This means it will be okay."
Hanna's money, and the money of other Wachovia customers, is insured up to $100,000 by the Federal Deposit Insurance Corporation.
Dr. Jane Treptow teaches economics at Broward College. She says customers should not be concerned. "For the customer itself, nothing's going to pretty much change. They're going to have the same teller; they're going to see the same people they've been seeing all along."
Wachovia shareholders may feel differently, however. It's been reported Citigroup will pay about a dollar a share, or $2.2 billion, for Wachovia. Now, shareholders are facing a big decision.
"The shareholders right now are taking a bit of a bath," said Dr. Treptow, "The market is fluctuating wildly today and will probably continue to do so because the market is very angry at Congress."
If you're concerned about your bank, Dr. Treptow advises you to do your homework. Look at how the bank is trading on Wall Street and check with experts to learn the bank's financial health.
As for this merger, Dr. Treptow says it could be good in the long run for both Wachovia and Citigroup, making them larger and better able to compete.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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