Four regional banks are involved in a new Web site that aims to change the way consumers shop for loans.
Zions Bancorp, PNC Bank Corp., National City Corp., and GreenPoint Financial Corp. have joined forces with LendingTree Inc., the Charlotte, N.C.-based company that created the site.
Lendingtree.com sets up a competitive bidding process for mortgages, auto loans, credit lines, and credit cards. Participating banks pay a broker's fee to LendingTree. The service is free to consumers.
The site works like this: Consumers select a product, complete an application, and e-mail it to LendingTree for credit scoring. The participating banks examine the application, underwrite it using their own lending criteria, and then make a proposal directly to the customer for the business.
Douglas R. Lebda, chairman and founder of LendingTree, said the idea was to match consumers and lenders more efficiently. "People like the idea of the bank coming to them," he said. "It's not so much price shopping as it is convenience."
The site lets banks control their expenses and offer more competitive pricing by reducing the costs of going through an approval process only to deny credit.
"You can price the loans by risk because you don't have to go out there and sell them," Mr. Lebda said. "Also, there is a higher likelihood of approval."
The Web site competes with more established ones, especially Intuit Inc.'s quicken.com. Mr. Lebda said lendingtree.com differs in one key aspect: Consumers only need to fill out one application for the loan product they want.
Consumers using quicken.com need to complete a separate application for each lender. Karen Cleeve, an Intuit spokeswoman, said the company feels that its application process gives consumers more control over their choices. She had no comment about the new competition from the LendingTree Web site.
A. Scott Anderson, president and chief executive officer of Zions Bank, the principal operating subsidiary of Salt Lake City-based Zions, said the bank chose the site to target Internet surfers in the Mountain States.
The site reaches a more favorable demographic group than traditional branch-based lending operations: younger, better-educated, and more- affluent consumers, Mr. Anderson said.
Other banks said they are using the site to expand established national business lines. New York-based GreenPoint, for example, said the Web site casts a wider net for its no-documentation mortgage product.
Other banks and specialty finance companies are scheduled to join lendingtree.com in the spring, Mr. Lebda said.
