Customers of CIT Bank and OneWest Bank, prepare yourselves. The merger of the 2 banks will certainly produce a monetary powerhouse that quickly sits as one of the most significant retail banks in the U.S. Modifications will certainly take place, and it might impact your financial resources when the transition process begins.

How the CIT OneWest Bank Merger Could Affect You

Online-only CIT Bank is readied to get OneWest Bank to form an institution with $67 billion in possessions and $28 billion in deposits. Exactly what’ll take place to your accounts and services? Is it bad or great for you?

I’ve actually reached out to a CIT Group speaker, however I’ve yet to receive a reply to my request for remark. Therefore, I share some of the possible effects of the CIT-OneWest bank merger:

What OneWest consumers can expect

As the part of the consumer base of the bank being gotten, OneWest customers are mostly subject to the changes that CIT Bank choose to implement. There’s no need to fret because the changes, if any, will certainly take time and customer notifications are sent well in advance of these modifications.

So, you can choose whether to keep your accounts or to take your money in other places.

Branding

Firstly, just like a lot of bank acquisitions, the preliminary phase commonly entails rebranding.

According to prepared remarks by John A. Thain, chairman and CEO of CIT Group, “This transformational transaction will certainly integrate CIT’s national middle market loaning platform with OneWest’s wholesale financing and branch banking franchise business to create a special carrier of retail and institutional financial services.”

Based on that statement, I am going to say that CIT Bank doesn’t intend on shutting down the branch network already constructed by OneWest. The 73 branches will sport brand-new signage with the online web site to follow.

Additionally, OneWest customer can expect to get newly-designed debit and charge card while mail will certainly likewise display the CIT Bank brand name rather.

Accounts and products

Changes to OneWest’s products and existing client accounts will certainly be the most challenging to forecast, considering that it entirely depends upon how CIT Bank wishes to accomplish with this bank acquisition.

Currently, there are specific product overlaps throughout OneWest and CIT – including cost savings and certificates of deposit accounts (both banks have Individual retirement accounts to hold these deposit accounts). OneWest takes an interest technique in offering different rates on savings and CDs for online and branch versions of these accounts. Not remarkably, the online-only OneWest deposit accounts carry a little higher rates – though not nearly as high as CIT’s online providings.

What I anticipate is for the branch versions of the accounts to continue to be as is, while the online versions of OneWest’s cost savings and CDs will certainly merge with CIT’s umbrella of savings and CDs. However, customers will certainly have their CD rates locked until maturation.

With that said, it would be a good idea for OneWest clients to simply head over to CIT Bank and make the most of CIT’s attractive rates immediately. Your money is winding up in the same store, it should be getting a better return.

For instance, OneWest’s online savings account offers a minimum of 0.40 % APY while CIT’s savings account offers a minimum of 0.90 % APY.

Customers with OneWest Bank’s other items most likely won’t check any significant modifications.

User experience

One of the technological edges that CIT Bank has more than OneWest is mobile banking. CIT Bank has native mobile banking applications for iPhones and Android, however OneWest doesn’t have mobile apps at all.

It’s rather shocking that a bank with $23 billion in properties does not have actually dedicated mobile apps. Thankfully, joining CIT Bank would likely indicate the OneWest clients will quickly have access to mobile banking apps to include convenience to their daily banking chores.

What CIT Bank customers could expect

The acquisition of OneWest Bank will certainly present branch-banking operations into – exactly what’s actually so far been – an online-only stance of CIT Bank. While the addition of brick-and-mortar areas will indicate more access points for CIT consumers, it could also contribute to increased functional expenses, which has an unfavorable impact on customers.

Convenience

Clearly, CIT Bank consumers will certainly take advantage of branch access if and when CIT systems are integrated with the branches of OneWest Bank. Currently, CIT Bank customers have no way to deposit paper checks (no mobile check deposit, yet) or cash to their accounts – the OneWest places may make these deal possible.

Furthermore, the branches mean that CIT Bank can offer a more detailed set of financial services. The 73 branches of OneWest are mainly found in Southern California – CIT is undoubtedly wanting to include even more branches and grow its physical presence.

Accounts and products

Existing CIT Checking account most likely would experience too much modification as a result of the acquisition.

However, OneWest does provide products that aren’t readily available with CIT Bank. The list consists of inspecting accounts, charge card, home loans and refinancing loans. Depending on how CIT wishes to play this, they could add these providings to its online-banking business.

Rates

Ever given that CIT Bank launched in 2011, it’s stood at, or near, the top of the charts for savings rates and CD rates. If you did not understand already, most online banks have the ability to provide outstanding deposit rates due to the fact that they do not need to deal with the expenses of running physical branches.

With the addition of OneWest branch network, there might be concern over the result on CIT Bank’s rate pricing. More candidly put, some people are worried that the entry into branch banking will mean low cost savings and CD rates from CIT.

There was a similar circumstance when Capital One got popular online bank ING Direct (now Capital One 360) in 2012. Capital One 360, nevertheless, was able to keep savings and CD rates fairly steady. For instance, the online savings account has maintained a 0.75 % APY considering that February 2013, when ING Direct officially become Capital One 360.

CIT Bank could do the same.

In the end

Generally, clients of both banks have much to anticipate, particularly when it comes to products and services.(If you are likewise thinking about the CIT-OneWest bank merger’s impact from the business viewpoint, look into my colleague Peter Bennett’s post.)

Also, as a suggestion: Consumers of both OneWest Bank and CIT Bank will absolutely have to think about how the brand-new bank will impact their deposit insurance coverage.

FDIC insurance coverage covers the first $250,000 per depositor per account type. Once the 2 banks become one, clients who’ve a total of more than $250,000 in a specific account kind will certainly have to consider moving the excess amount to another bank.

Fortunately, there are a myriad of savings accounts from other banks to hold that extra cash money.