MetLife Looking to Sell Banking Division, Avoid Excess Government Regulation

MetLife, Inc. recently announced its intentions to sell MetLife Bank, N.A.’s depository business, which includes savings accounts, certificates of deposit and money market accounts. However, MetLife says it plans on continuing to offer residential mortgages through its MetLife Home Loans business.

For MetLife’s reverse mortgage loan officers, this would mean MetLife is subject to the same regulations that apply to other non-bank mortgage companies, and would necessitate the state licensing that is required for reverse mortgage originators.

The decision to sell the banking division has been reached because MetLife is primarily involved in selling insurance, and the company says a bank holding company structure is no longer appropriate, as rules and regulations that apply to MetLife’s banking also bring scrutiny to the company’s insurance operations. The Dodd-Frank Act, and the ensuing Consumer Financial Protection Bureau, introduce a new set of rules to bank holding companies that MetLife is likely looking to avoid.


“MetLife Bank represented just 2% of MetLife Inc.’s first quarter 2011 operating earnings, and we do not believe it is appropriate for the overwhelming majority of our business to be governed by regulations written for banking institutions,” said Steven A. Kandarian, president and chief executive officer of MetLife, Inc. “In a highly competitive global insurance marketplace, it is imperative that MetLife be able to operate on a level playing field with other insurance companies.”

MetLife Bank has been around since 2001, when it began offering retail savings products via the internet. In 2008, the company introduced its Home Loans division upon acquiring the reverse mortgage business of EverBank LLC and certain mortgage assets of First Horizon Home Loans from First Tennessee Bank; MetLife will continue to offer mortgages through this division.

As of May 2011, Reverse Market Insight placed MetLife as the third-biggest retail and wholesale reverse mortgage lender, with 16.1% of the market share.

Written by Alyssa Gerace

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  • I know it’s just 2% of their business but they are being forced by government OVER REGULATION to sell it. I’m sure the 2% figure is not so small to the people that will be losing their jobs!

  • It sounds like the job losses will be minimal since it’s just a change in the legal structure of the businesses that operate within the bank (which did not operate retail branches).  This change seems to make sense given the regulatory environment, and taken alone is not any indication that they’re reducing their commitment to RM’s.

  • Well, we’d all been looking to see what MetLife would do in the wake of the One West/Financial Freedom, Bank Of America, and Wells-Fargo exits.

    Like all those decisions, this is just another one made at the senior corporate level to protect other and larger elements of the corporate portfolio, operations, and branding and to out-source the negative impacts of the decision to the people in the minority position.

  • Hang on, isn’t the Home Loans division a division of the bank?  That’s how they want their mortgagee clause to read.
    Also, I wonder what percentage of their operating earnings is generated by the home loans division.  
    This seems like foreshadowing to me.

  • The NMLS licensing exam is difficult for some originators to pass; some of MetLife’s originators may have chosen it as their employer because of its bank status. There are other banking entities that may employ some of the MetLife originators who are unable to obtain licensing.

    In the meanwhile, several brokers have chosen to wind down their operations, and the principals have been entering into “net branch” arrangements with bank entities, some of which have recently entered the reverse mortgage business. The reason for this is more complicated than just licensing; is has much to do with recently promulgated compensation and disclosure rules affecting brokers and direct lenders differently.

    Although a couple of household names have exited from the reverse mortgage industry, there are still plenty of lenders (and originators) remaining to serve this shrinking market.

  • I got out of the whole mortgage industry March 28th 2011 after doing reverse mortgages for the last 8 years, and got a job in a completely different industry. All i can say is i no longer have any stress about money. Hope you are all still able to make money in your industry with all the decreased home value, higher interest rate, higher cost lower quality appraisal. Not to mention the reduction in pay you all took in April of this year. Wish you all the best of luck.

    • Can I ask you you what industry your in now. What industries did you research.. I am wondering since I am still a lender but see the writing on the wall.

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