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