Killinger is leaving the nation's largest thrift after months ofpressure from shareholders who are upset that the company's shareprice has fallen approximately 90% over the past year. The59-year-old ended a 17-year term as the company's chairman in Juneand had watched the same fate befall his peers at Citigroup Inc.,Merrill Lynch & Co. and Wachovia Corp. Killinger's replacementis Alan Fishman, 62, who last year left the nation's second-largestthrift, Philadelphia-based Sovereign Bank, to become chairman ofthe New York City-based commercial mortgage broker Meridian CapitalGroup.

With regard to its regulatory issues, a source with the OTF saysthe MOU is "an agreement on actions to correct some situations wehave found to be inadequate or less than optimum" but declined toprovide any additional information. WaMu said the regulatorywarning is related to its risk management and compliance functionsand that it will provide regulators with a current multi-yearbusiness plan and forecast for its earnings, asset quality, capitaland business segment performance.

Federal banking regulators have increased the number ofstruggling banks they have effectively put on probation forinadequacies in the business practices, and also has been issuingmore guidance. Last week, the OTS issued guidance about managingprograms offering home equity lines of credit in response to anincrease in banking institutions curtailing, suspending orterminating customers' home equity line of credit."[The] guidanceemphasizes that institutions taking such actions must comply withfederal laws and rules designed to protect customers," states theOTS. "While sound underwriting and effective risk managementsystems are essential, associations must employ these strategies ina manner that complies with applicable consumer protection laws andregulations."