FDIC may leap on JPMorgan settlement

Yet another Washington regulator is looking to get a piece of Jamie Dimon's JPMorgan Chase, The Post has learned.

The Federal Deposit Insurance Corp., a tertiary regulator, is mulling whether it wants to jump aboard JPMorgan's $13 billion mortgage bond settlement, sources said Thursday.

The late arrival of the FDIC, which is primarily an insurer safeguarding bank deposits, has bogged down the settlement talks, sources said. Once thought ready to be signed this week, the JPMorgan-regulator settlement is now not expected until next week.

The FDIC, which has about $3 billion or $4 billion at issue with JPMorgan, was brought into the negotiations at the "11th hour," said sources familiar with the situation.

Regulators and agencies already in on the settlement talks include the Justice Dept., the Securities and Exchange Commission, the New York and California state Attorneys General, the Federal Housing Finance Agency, and Fannie Mae and Freddie Mac.

The FDIC was invited to review the tentative settlement terms either Monday or Tuesday and is said to be weighing whether it wants to be party to the agreement, a source said.

A FDIC spokesman declined to comment, as did a spokesman at JPMorgan.

The FDIC's dispute with JPMorgan harks back to the sprawling bank's crisis-era acquisition of Washington Mutual.

The FDIC may be owed billions of dollars tied to mortgage backed securities originated by WaMu and shopped to a number of banks that eventually failed, including Montgomery, Ala.-based Colonial Bank, Macomb, Ill.-based Citizens National Bank and Louisville, Ken.-based Irwin Union Bank & Trust Co.

The FDIC has been looking for JPM to cover losses to creditors related to mortgage bonds those banks acquired from WaMu and Bear Stearns.

Also under dispute between the federal agency and JPM is whether the FDIC should indemnify Dimon's bank against losses from other toxic assets it inherited when it acquired the WaMu in 2008.

JPM has argued that it should be given credit for helping the government during the financial crisis and taking over troubled financial institutions like WaMu and Bear Stearns.

In a 4-year old suit, Deutsche Bank, acting as trustee for purchasers of mortgage bonds, sued JPMorgan and the FDIC, claiming that it is owed as much as $10 billion for the shoddy loans originated by WaMu.

The FDIC claims that JPMorgan should be responsible for the troubled debt and that it should be dismissed from any lawsuits.

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