Print Page Close Window

Washington Mutual Pledges Largest-Ever Community Lending Commitment of $375 Billion

SEATTLE--(BUSINESS WIRE)--Sept. 5, 2001--Washington Mutual (NYSE:WM) today announced the largest-ever community lending commitment of $375 billion over the next 10 years, more than tripling its 1998 commitment to the low- to moderate-income communities it serves.

The new commitment is earmarked to begin in 2002 for communities throughout the United States.

In 1998, the company committed a record $120 billion for CRA goals, and with the help of its many community partners, the company reached almost 30 percent of the ten-year goal in just two years.

"Our continued success as one of America's leading financial services companies provides us with the opportunity to set even higher community service standards for the future. Today, we continue our more than 100-year legacy of making the communities we serve better places to live, work and do business," said Kerry Killinger, Washington Mutual's President, Chairman and CEO. "After carefully assessing the continued growth of our company and the anticipated level of lending resulting from a successful merger with Dime Bancorp, we're confident that we can raise the bar in support of our communities."

Under the CRA commitment Washington Mutual will provide loans and other financial support to communities consisting predominantly of people of color, to residents of low- to moderate-income (LMI) census tracts, and to people whose income is below 80 percent of median income.

The $375 billion commitment targets single-family lending, consumer and small business lending, multi-family lending and community investment and development: -- Single-Family Lending -- $300 billion in housing loans will be

        provided to minority borrowers, borrowers in LMI census
        tracts, and borrowers earning less than 80 percent of median
        income. Of this amount, $100 billion is specifically targeted
        for low- to moderate-income borrowers.

    --  Consumer and Small Business Lending -- $48 billion is targeted
        for consumers and small business owners, including businesses
        owned by people of color, women or disabled persons.

    --  Multi-Family Lending -- $25 billion is earmarked for
        apartments and manufactured home park developments in LMI
        census tracts or for families earning less than 80 percent of
        median income. There is no minimum loan size for multi-family
        loan programs.

    --  Community Investment and Development -- Washington Mutual is
        committing $2 billion in investments and loans to community
        development and low-income housing initiatives, tax-exempt
        housing revenue bonds, and community banks and financial
        institutions targeting multi-cultural communities or other
        community needs. This commitment includes support for
        pre-development work, which it funds through nonprofit
        organizations and investments in community development

"As a leading national lender, we firmly believe in providing greater access to credit and financial products to the communities where it is most needed," Killinger said. "We look forward to working with our community partners to further our legacy of service well into our second century of doing business."

The company said that the continued support of the Federal Home Loan Bank System and access to its programs in the multiple regions it serves are additional factors that will be pivotal in the company's ability to meet its commitment.

To help achieve its ambitious goal of serving the needs of its communities in the years to come, the company has laid out a detailed set of plans, which include: -- Innovative Solutions for Under-served Communities --

        Washington Mutual has developed a wide range of collaborative
        programs to support the special needs of the under-served
        communities it serves. These programs include a focus on
        non-profit housing providers, Native American tribes,
        self-help housing, Community Land Trusts and participation in
        the Federal Home Loan Bank's affordable housing programs.

    --  Providing Free and Low Cost Financial Services -- Washington
        Mutual offers a variety of free and low-cost services,
        including Free Checking(TM) which features unlimited check
        writing, no monthly service fee, no minimum balance obligation
        and no direct deposit requirement. Nearly all of Washington
        Mutual's ATM machines are surcharge-free, meaning anyone --
        including low- to moderate-income non-customers -- can use
        them without paying a fee to the bank.

    --  Corporate Giving -- Washington Mutual returns 2 percent of
        pre-tax earnings to the communities it serves through grants,
        sponsorships, loans at below market rates, in-kind donations,
        paid employee volunteer time, and other financial support.
        Contributions are proportional to the size of operations in a
        particular market and take into account special needs of
        communities. Washington Mutual also encourages volunteerism
        among its employees by providing four hours of paid time off
        each month for service to nonprofit groups and causes.

Washington Mutual also is committed to adhering to a set of formally adopted responsible mortgage lending principles to ensure that underserved communities and borrowers have credit available on fair and appropriate terms. Under the principles, Washington Mutual:

  • Will not sell single premium credit insurance on mortgages. The company will provide an option for credit insurance billed on a monthly basis with clear disclosures that the product is completely optional.

  • Will not impose more than 5% in points and non-pass-through fees on any loan, unless the borrower receives a direct reduction in the loan's interest rate.

  • Will provide customers with an option between loans with pre-payment fees and lower interest rates and loans with higher interest rates, but without pre-payment fees.

  • Will only make mortgage loans where the borrower has a demonstrated ability to repay and will not refinance any loan unless there is a net tangible benefit to the borrower.

  • Will not offer subprime loans with compulsory negative amortization, balloon payments, or non-default call provisions.

  • Will not originate high-cost mortgages (based on current HOEPA standards) in excess of $20,000.

The full text of Washington Mutual's Community Lending Commitment and Responsible Lending Principles can be found on the company's web site at

With a history dating back to 1889, Washington Mutual is a national financial services company that provides a diversified line of products and services to consumers and small- to mid-sized businesses. At June 30, 2001, Washington Mutual and its subsidiaries had consolidated assets of $229.30 billion. Washington Mutual currently operates more than 2,300 consumer banking, mortgage lending, commercial banking, consumer finance and financial services offices throughout the nation.


CONTACT: Washington Mutual
Alan Gulick, 206/377-3637 (Media)