Five years after JPMorgan Chase & Co. acquired the banking operations of failed thrift Washington Mutual Inc., the bank's lawyers are still tangled with regulators over the wording of the 39-page purchase agreement, the Wall Street Journal reported today. The question of who bears responsibility for Washington Mutual's legal liabilities is taking on increasing urgency as J.P. Morgan negotiates a pact with the Justice Department that would end probes of soured mortgage bonds issued by J.P. Morgan and Washington Mutual during the housing boom. The Justice Department is trying to insert language into the settlement stipulating that none of the costs the bank pays regarding Washington Mutual will be passed to the FDIC. J.P. Morgan wants the ability to recover costs associated with Washington Mutual from the FDIC receivership that liquidated the thrift in 2008. At issue is exactly which liabilities J.P. Morgan assumed when it took control of Washington Mutual in September 2008.
