WHEN Washington Mutual collapsed in 2008, it was the largest bank failure in American history. So the $64.7 million settlement struck last week by federal banking regulators and three former WaMu executives seems like small potatoes indeed.

Worse, most of the money didn’t even come from the former executives’ pockets. Instead, it came from directors’ and officers’ liability insurance policies paid for by the bank.

The deal, agreed to by the Federal Deposit Insurance Corporation, requires that the men, among them Kerry Killinger, WaMu’s former chief executive, forgo claims for insurance coverage and some past compensation that they had requested from the bankruptcy court.

To anyone familiar with WaMu’s Wild West lending practices — “The Power of Yes” was the bank’s motto — the agreement might seem like yet another example of the minimalist punishment meted out to major players in the credit boom and bust.

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