AABD Executive Director David Baris and BuckleySandler counsel Peter Olszewski authored, “They’re Not All Bad Guys – Mortgage Bankers Seeking Bank Charters” for National Mortgage News.
Banking presents opportunities for non-depository mortgage companies seeking to boost competitiveness and expand market share. By acquiring or establishing a bank, a mortgage company can enjoy advantages over nonbank lenders, including access to cheap and reliable funding through FDIC-insured deposits, the ability to export interest rates, exemptions from state licensing, and—with a federal charter—preemption of many state mortgage lending laws.
Banking products and services offer new revenue streams, and can help a mortgage company reduce concentrations, diversify risk and minimize uneven business cycles. But regulatory hurdles have become so difficult that unless the mindset changes, it is unlikely that a mortgage company can acquire or establish a bank.
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