Capital One Bank has stopped offering unsecured, CD-backed and savings-backed loans in the Baton Rouge market, spokesman Steven Thorpe confirms.
“It was a difficult decision and one that was made after careful consideration,” Thorpe says. “We will continue to offer a suite of consumer lending products at competitive rates in the market, including mortgage loans, auto loans, equity loans and secured credit cards.”
Capital One on Monday quit accepting applications for the three loan products no longer offered by the bank, Thorpe says. Without providing specifics, Capital One regional spokesman Patrick Mendoza says the discontinued loans accounted for “a small part of our business” in the Baton Rouge area.
“Leaders at Capital One have determined that the returns on this business are not sufficient to warrant the investment required to grow this business,” he says. “Customers who have these loans will not be impacted by this change whatsoever.”
While retired LSU professor of banking and finance Willie Staats says he was somewhat surprised to learn about Capital One’s decision to end some loan products locally, he adds that all banks are taking a fresh look at their portfolios in light of increased regulation and the ongoing effects of the Dodd-Frank Act.
“Banks are businesses, and all of them are looking for more income and greater efficiencies to offset the added expenses they’re taking on,” he says. “That’s essentially what I’m hearing when I talk to bankers across the country. If a product isn’t offering a decent margin, they’re not going to offer it anymore.”
Staats says he expects more banks to make similar changes in their product lines going forward.
“Banks have two ways to go right now. One way is to simply charge more fees, which isn’t very popular with customers, obviously. The other is to get more efficient, consolidate and find products they can specialize in,” he says.
Last month, Capital One announced the positions of Steve Lousteau and Scott Ridley, group executives for retail and business banking in Greater Baton Rouge, respectively, will be eliminated as of May 1.
The position cuts are part of a larger restructuring effort by the bank that will lead to the elimination of about 30 executive positions across the country. You can read that Daily Report story here.
Editor’s note: This story has been changed since its original publication.
