Now that Wells Fargo has tossed its wholesale division into the deep dark sea, the question becomes: who’s next among the megabanks to leave? And actually the answer to that question might be a simple no one. Wells is out, Bank of America is out and J.P. Morgan is out. After Wells the three largest remaining players in wholesale include: Provident Funding, Flagstar, ING, and Fifth Third. From what we can ascertain all four like the wholesale business because it compliments their other channels. But a larger question may loom for participants: is wholesale really cheaper than retail? We’re continually told that yes it is. Until the cost paradigm changes, chances are wholesale will live – but will it ever thrive again? It all may hinge on what the Consumer Financial Protection Bureau does with its loan officer compensation rule. Stay tuned.
