Where Washington Keeps Its Money: Most Is Tied Up in a Handful of Huge Banks


The Biden administration and banking regulators have been working overtime to restore confidence in the banking system. After two of the largest bank failures in U.S. history, here's what you should know about banking in Washington state.

While Washington is home to 75 banks and 77 credit unions, most of the state's money is tied up in a handful of huge institutions. Even the biggest state-headquartered banks hold less than 5% of an in-state market dominated by global giants like Bank of America and JP Morgan Chase.

The crisis has put a new focus on federally insured deposits, especially the Federal Deposit Insurance Corp., a government-backed agency that picks up the pieces when a bank collapses.

Generally, a bank fails when it cannot cover its depositors and meet its financial obligations. Though not uncommon, the U.S. has not seen bank failures of this magnitude since 2008.

No depositor has lost a penny of FDIC-insured funds since the Great Depression in 1933, the agency says.

So how do Washingtonians deposit their money?

At the end of June, 75 federally insured banks with 1,500 offices in Washington held $231.5 billion in deposits, according to a Times analysis of FDIC data. That analysis shows 85% of that money is in fewer than 20 banks.

Five banks — Bank of America, Chase Bank, Wells Fargo Bank, U.S. Bank and KeyBank — hold nearly two-thirds of the market share.

Geographically, nearly 70% or $157.6 billion worth of deposits were held in the Seattle-Tacoma-Bellevue metropolitan area, the largest market in the state.

Less than half that amount constituted the second-largest market, the Portland-Vancouver-Hillsboro metro area. Spokane, Bellingham and the Olympia metro areas follow thereafter.

Credit Unions vs. Banks

Not all Washington money is deposited in banks. Individuals and businesses hold 4.5 million credit union memberships in the state.

Credit unions are similar to banks in that they  offer similar financial products including savings accounts and certificates of deposit. Unlike banks, though, they are not-for-profit and distribute gains among members.

Credit unions tend to serve a specific region or group of people, though membership requirements for many have broadened in recent years to include all Washington residents. They are popular for often offering better rates and prioritizing returns to their communities.

State-chartered credit unions are regulated by the state while federally chartered credit unions are under the regulatory authority of the National Credit Union Administration. Deposits at both types are insured by the NCUA, in the same way the FDIC insures banks.

In Washington, at the end of last year, there were 28 federally chartered credit unions and 49 federally insured, state-chartered credit unions.

These institutions held a combined worth of $73.6 billion in deposits — nearly 95% of which was in state-chartered credit unions.

In the last three months of 2022, membership in credit unions grew an average of 2.2%, deposits grew an average 1.7% and their overall net worth increased by more than 10%.

More than a third of these deposits were held in Boeing Employees Credit Union, or BECU, a federally insured state credit union originally established to serve Boeing employees. Membership has since expanded to include any Washington resident.