MetLife may not be moving forward with its forward mortgage business. In addition to a previous announcement that the company was contemplating the sale of MetLife Bank, N.A.'s depository business, the company is now exploring the possibility of a sale of the bank's forward mortgage business as well.
MetLife Inc., (NYSE: MET) a global provider of insurance, annuities and employee benefits programs, has found that a bank holding structure may not be a desired focus. This consideration comes at an interesting time; MetLife performed relatively well during the recent financial crisis and did not need a capital infusion from the U.S. Treasury Department, but it has been one of a few insurance companies caught in the crosshairs of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Under Dodd-Frank, a non-bank insurer (such as MetLife, as well as Prudential and others) could be designated as a systemically important financial institution (SIFI), which would lead to regulation by the Federal Reserve Board as well as being subjected to additional requirements such as higher capital standards. The criteria for being considered SIFI includes having at least $50 billion in total consolidated assets.
"While the rules regarding 'systemically important' have not been finalized," a MetLife spokesperson said, "exiting the depository business and deregistering as a bank holding company will enable MetLife to operate within the same regulatory framework as other insurance companies."
