State Farm Bank is closing. All their loans will be outsourced to Quicken Loans. Definitely no surprised by this information.
59 replies (most recent on top)
Today.
$700 million injection by Mother Mutual in 2008 to the bank to keep regulators at bay. Think they've made close to that in subsequent years COMBINED? No. One year of profitability does make it a profitable venture.
Bank closing. They closed building 1 at the the Tempe Hub. Next auto will go away I see it coming.
Hard to sell junk. Even with an owner's manual...
My understanding is that one of the deals fell through because the due diligence uncovered a worse than expected picture of portfolio performance.
It will happen, but will take longer than expected.
What's the latest on the bank?
There in no way this bank will be anything other than outsourced product offerings within the next two years.
EM was a total joke. We had a fire drill meeting his first week on the job. I made a comment on what regs meant about a certain situation, and why we were compliant and interpreting it correctly. He came unglued that this was his job and that he would make determinations on whether we were compliant. He wanted changes and later had to backtrack because I was correct and he was wrong.
@21mzs - Compliance course correct from EM? Spare me. That arrogant buffoon let Compliance deteriorate to the point Bank was in serious danger. It was the DC consultant they brought in to run Compliance who righted the ship.
Cards announcement coming in the next 30 days.
EM set us on a course correct for compliance and cuurent leadership is staying on the straight and narow.
Stop trying to bring is down
Looked at the CFPB Complaint data today. SFB has had 77 non-fraud related complaints this year. Of these, there is still a pattern of credit reporting issues.
Also, I found it interesting that 3 complaints were 'Closed with Monetary Relief'
When will the regulators come crashing down again?
It's a holding pattern. Hard to think but , yes, a fortune 50 company with over $100b can afford to keep a POS bank in a holding pattern for years while it decides what it wants to do with it or to cut bait. KM is the holdover avp needed to appease the regulators and his no nothing chronies are there for him use when needed mostly to keep people busy on meaningless work while the holding pattern plays out.
Operating like they are in 2005? More like 1995.
They also refuse to address the question of what they want to be. Bank does not have branches but refuses to allow communication with our customers via email. period. Customers cannot even be sent blank forms. Account numbers are not available online for any account type (unless you access your statements), unlike EVERY OTHER online bank. Customers cannot notify Bank of upcoming travel or similar things without calling, which is antiquated at best. The customer online portal is from 2006. We do not charge for loan payments over the phone (used to!), transfers of funds in via ACH over the phone or other things that can accomplished online or via the app to encourage customers to use those services instead of calling. And last, but not least, Bank has no OCR or barcoding system on any forms. That means that EVERY form that is received (fax, mail or email from agency) has to be reviewed by a person before ANY work can even begin. State Farm Bank is an online bank operating in the year 2019. It needs to quit acting like it is a retail bank with branches operating in the year 2005.
Bank was poor decision. Executive is responsible. Be accountable. Part of the problem they have!
It was not a poor decision by executive to start the bank. The poor decisions were made in how it was structured, how it was executed and the leadership brought in after The O Man retired.
They needed someone with national banking presence and opted for MS who was a total waste.
Bank is a clown show
@1Gtuk....I was responding to a sweeping general statement that claimed nobody who handles money would invest in insurance. That is clearly, obviously incorrect. If what you meant was “I wouldn’t invest in insurance”...should have said that.
1 Gnej depends on who's sheet you're looking at! I look at mine and adjust accordingly to reduce MY expenses. That's why State Farm Bank is a poor place to invest. Now if State Farm thought about the customer, it's wise to close the bank. Mr. GEICO is getting what he wants because he has a better business plan for the customer. Go back to basics!
@1Gxrs...” Any person who handles money knows insurance is not a place to invest.”
Maybe think before typing. There’s this guy named Buffet in Omaha who’s been telling everybody who will listen that GEICO is the crown jewel of his little portfolio because of the “float” between collecting premiums and paying claims.
BTW, he’s kind of known as “a person who handles money”.
Any person who handles money knows insurance is not a place to invest. Insurance is an expense on any income statement. Bye Bye Bank! Another poor decision by executive.
What is happening in the bank?
The bank has no chance of lasting long term
Good!
What's the press release going to say?
SF is an expense and NOT an investment! Reduce expenses! Hint hint!
Another press release is coming soon on the future of the Bank
Bank is being wound down very slowly
I really hope my local branch stays open.
The digital experience is terrible because SF tech people like KF got involved and pushed expensive archaic solutions with no understanding of what real banks use. Deposits never had a good digital footprint and offputting manual processes in the background.
Vehicle and mortgage lending did not want to be offered on the web. They went hook, line and sinker with the agent model.
Cards had a strong and growing presence, decoupled from the SF portal, but were pressured to conform.
- They are smart and committed to growing the Bank conservatively just like they've done for the past 20 years.
Maybe, but no thank you. While they are growing slowly, my pay goes down and not even inflation adjusted. I left to make almost double what I was making at SF Bank. All my colleagues who had half of a brain left to get jobs elsewhere because they got paid way better. I salute your loyalty, but, loyalty doesn't put food on my table and neither does it pay my cruise tickets. Good luck to you.
- No company in it's right mind would take that long to close anything.
Are you kidding? Look up OCZ, Circuit City, CompUSA...etc. Have you heard of Retail Apocalypse? Why do you think Sears is still open? Obviously by your logic you they should close immediately right? You sound like the world is black and white. If SF could only retain talents such as yourself, I worry about its future.
- I can only imagine you're some bitter 65 year old who got cut at some point.
Cutting someone at age 65 is potentially age discrimination. Everyone whom I know got cut are at executive level. They start from whomever is paid the most.
- HR is going to work with them to retain their jobs, even if they are in another area. SF is a great company.
Great – 5% bonus and constant fear of being cut. Yes, they do work with you. Feel free to take that call center job as it's "the only thing available" to you at the moment. Again, no thank you.
In case you don't know, SF's displacement is causing the real estate market in BN to take a big hit. My home price is positively correlated to the well being of SF. I was already taking a big risk working in a city where there's only one reputable employer; mistake on my part for not realizing I'm also taking a risk with my property value. Another mistake on my part to believe SF when HR told me "we never have layoffs and we treat employees like family." Well, maybe under Mr. Rust Jr., but definitely not Mike Tipsord. Go to NAIC and look up SF's market share. Eventually, they'll lose the #1 spot.
The OP headline is stupid, it’s only mortgages. However, Bank has lost accounts this year and I doubt will ever recover. One of the reasons is the digital experience for vehicle loans, deposits and credit cards is an absolute mess. And consider its a virtual bank. The bank and bank ET has absolutely bungled this thing and almost nothing new has gone out since 2016. Yet, they can’t even replace the digital experience for opening a new deposit product despite trying since 2016.
I agree with the comments the bank will probably close in the next few years - the mismanagement and inability to function as a virtual bank with even the most basic digital platform is clear to anyone with half a brain.
It wasn't luck that kept SF Bank's doors open amid compliance issue after compliance failure. It was huge sums paid to DC lobbyists and certain leaders that outright lied to the regulators.
After several years under a MOU, it seemed as though their troubles were behind them until the lax credit reporting issues surfaced. This was a known problem years ago that is another case of hiding info and lying to examiners.
It is only a matter of time until more scandal finds its way out of the shadows
SF Bank is profitable....... barely. Couple years ago the clowns running the show got into all sorts of Compliance hot water. We were lucky to get let off by the CBFP with not even a slap on the wrist.
The Bank is not going to be the channel to make up for declining Auto premium. Question is if the relatively small amount of NI justifies the giant Compliance risk. The high priced consultant running the Compliance show won't be there forever. And future Presidential admins might not be so incredibly lenient with violations.
So no response to the fact you make no money or that there’s never been commitment to the bank from a marketing spend perspective? Just says “wow” and calling me a troll. Sorry kid, but your community college education has left you ill suited to discuss bank performance. I’m glad you committed your Saturday to arguing with me though. I need easy wins.
Hahaha oh wow, you seriously know nothing! Comical. I'm actually not going to explain anything more to you because I dont need to, and it really makes no difference to me what you think. The Bank does make money. Also, everyone in mortgage has been advised that HR is going to work with them to retain their jobs, even if they are in another area. SF is a great company. If they were closing the Bank they would have done it 2 years ago, but they are smart and committed to growing the Bank conservatively just like they've done for the past 20 years. Bye troll, enjoy your wild suppositions. I can only imagine you're some bitter 65 year old who got cut at some point. Sorry about that, but coming on this board to try and upset current employees isnt a good look old fella.
I’ll keep “trolling” because your statements make no sense at all. I’m sure the people in mortgage operations don’t share that same optimism you have. You make no money, period. I don’t have to work there to see that. This is a bank that State Farm has never committed to from a marketing and advertising perspective. Is that changing? If not why do you think you’ll suddenly be anything more than mediocre when non-bank fin tech companies are eating into real banks profits?
Please defender of all that is State Farm bank tell why you expect something to change when all of the facts support the opposite.
We we doing poorly the past several years, and now we are doing better than that. That's what I said, and I stick by it as the truth. I dont have to defend that statement to you, especially since you have already shown you havent the slightest idea what's going on here. A restructure doesnt just automatically fix everything and put you in your best position ever. If that were the case every company in the world would restructure yearly. We ARE doing better after it - but it's going to take some time to gain the kind of growth volume we need to turn a major profit. We here at the company know that, and have plenty of reasons to be optimistic. Keep trolling, troll.
You’re the one saying you’re doing better than you have been...I’m repeating your words bud. Classic move to insult the person when you don’t have any facts to support your argument. I’d you’re the best sf bank has they should shut the doors today.
Plus...if you’re not going to do better after a restructure then why restructure?