Magazine article American Banker

Thrifts Urged to Make Use of Commercial Openings

Magazine article American Banker

Thrifts Urged to Make Use of Commercial Openings

Article excerpt

SAN FRANCISCO -

Savings and loans must diversify from their traditional home-finance focus to survive into the new millennium, according to speakers at a recent mortgage conference here.

One attraction of the thrift charter-and a hot topic of debate in Washington now-is that it "does mix banking and commerce," said Rick McGill, president and CEO of Quaker City Federal Savings and Loan Association in Whittier, Calif. Quaker City specializes in multifamily and commercial real estate loans.

Mr. McGill, in a panel discussion at the western secondary market conference last week, focused on the growing concern over the entry into the thrift business of corporate giants like General Electric and General Motors-both of which possess charters-and of Wal-Mart Stores Inc., which recently positioned itself to enter the financial services realm by acquiring a thrift. Nordstrom, a department store chain, and insurance companies like State Farm are also planning to use thrift charters to advance into financial services.

"The small banks are truly afraid of some of the implications of the thrift charter down the road, owned by a number of companies," Mr. McGill said.

Traditional thrifts, which use deposits to fund home loans, are now being joined by institutions that build assets outside the traditional branch structure. These include multifamily lenders, commercial real estate lenders, consumer lenders, subprime lenders, and mortgage bankers, Mr. McGill said.

"I think the asset, customer-driven models are going to continue to evolve and thrive," Mr. …

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