In order to escape tough new federal regulations from the Dodd-Frank Act, MetLife Inc. is selling $7.5 billion of its banking business to Norwalk-based GE Capital Financial Inc.
At the end of the third quarter, MetLife Bank had close to $10.7 billion in deposits. Once the deal closes sometime between April and June 2012, GE Capital will acquire approximately $7.5 billion, which includes certificates of deposit and money-market accounts, according to Courant.com.
"This transaction with GE Capital ensures that customers of MetLife Bank will continue to be served by a high quality organization that already meets the financing needs of more than 100 million consumers," MetLife CEO Steven A. Kandarian, said, Courant.com reports. "At the same time, this agreement is a significant step toward MetLife's no longer being a bank holding company."
The remaining $3 billion is in custodial deposits that are associated with MetLife's mortgage business. These are not included in the transaction but will be transferred out of MetLife Bank in the next six months.
Without its banking business, MetLife is able to compete with other life insurers that are not subject to the new federal regulations that Congress passed in the wake of the 2008 financial crisis.
The transaction between MetLife Bank and GE Capital will, however, be subject to regulatory approvals and other closing conditions.