Citizens Bank Stops Offering Mortgages

The Globe and Mail reported that Vancity’s online banking arm, Citizens Bank, will stop offering residential mortgages and focus solely on credit cards and foreign exchange services for non-retail members. This has resulted in Vancity selling the majority of its retail loans, including mortgages, personal loans and secured lines of credit, to TD Canada Trust. This follows on the news back in November when Citizens Bank announced they were retreating from the broker channel.

Vancity President and CEO, Tamara Vrooman , says it is a good business decision because it returns capital that can be reinvested to enhance member services at the credit union. It also focuses Citizens Bank on what it does best.

“We pioneered online banking in Canada, but it’s become a crowded marketplace,” says Vrooman. “Our members have told us repeatedly that they want us to focus on our core strengths. We’re local, we’re community-focused, and our offering is based on building relationships and providing service. In a national, online market, we were unable to achieve the scale necessary to succeed. Therefore, the bank’s business model wasn’t making full use of our strengths.”

 

The sale, which closed on August 5, 2009, means that:

  • Citizens Bank will become a non-deposit-taking bank
  • Citizens Banks’ three boutique branches in Vancouver, Calgary and
    Toronto will close in December of 2009.
  • Most members who currently have mortgages or loans with Citizens Bank
    will see their accounts transferred to TD Canada Trust. For the time
    being, until conversion in early 2010, Citizens Bank will continue to
    service these accounts. Customers can continue to call 1-888-708-7800
    or visit www.citizenbank.ca for service on these accounts.
  • Savings and chequing account members will be free to transfer their
    accounts to Vancity in B.C., or to another financial institution of
    their choice.
  • Term deposits not in RRSPs or other registered accounts will be
    serviced until they mature and then paid out.
  • Registered savings plans will need to be transferred to another
    financial institution of the member’s choice.
  • Members with group insurance on credit products will continue to have
    coverage for the period Citizens Bank is servicing the business until
    conversion in early 2010.
  • In commercial lending, CB employees will continue to service existing
    loans outside of B.C. and new loans will be underwritten by Vancity
    within B.C.

None of Citizens Bank’s 30,000 members need to take any immediate action. Citizens Bank will work closely with each membr to minimize any inconvenience and provide the support they need to transfer their business over the coming months.

Related Topics

Mortgage News / Mortgages

One thought on “Citizens Bank Stops Offering Mortgages

  1. I have been with Citizens Bank for 4 years .The customer service in this bank has exceeded my expectations. Manager helped me get organized in a way that has helped me grow my business. I recommend that any young entrepreneur or start up to get signed up with their business banking services as it can be difficult for an artist/creative person to get organized. I also have an account here and I am very satisfied with this bank.

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