RESTON, Va. - (02/21/05) -- Student loan giant Sallie Mae saidlast week it will fight efforts by JP Morgan Chase to dissolve thetwo entities' joint venture on student loans, as each of thecompanies muscles in to carve out the dominant share of the market.The two biggest players in the student loan market have had a dealsince 2002 under which Sallie Mae buys and services loansoriginated by Chase Manhattan, one of the precursors to JP MorganChase. But since last year's acquisition of Bank One, thesecond-largest originator of student loans, JP Morgan is seeking toleverage its new market clout absent Sallie Mae, now the market'sbiggest lender. JP Morgan filed suit in Delaware Chancery Courtlast Thursday to dissolve the multi-billion dollar venture becauseit said it now sees Sallie Mae as its major competitor for studentloans since Sallie's privatization has transformed the company fromsimply a buyer/servicer to the nation's number one originator ofstudent loans. According to the U.S. Department of Education,Sallie Mae, with a loan servicing portfolio of $108 billion, wasthe top originator of guaranteed student loans in 2004 with $4.2billion of loans, while Bank One (now a JP Morgan subsidiary) andJP Morgan Chase, were numbers two and four, with $4 billion and$2.5 billion, respectively. The top credit union was UniversityFCU, Austin, Texas, which was number 76 among all student lenderswith just $64 million in loans in 2004.
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By training a core payment card fraud-detection platform on more than 15 billion transactions, the card network is honing the accuracy of warnings sent to issuers about suspicious purchases.
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Rep. Andy Barr, R-Ky., is introducing a bill to establish an Office of Supervisory Appeals at each of the banking regulators and that would give banks more power over the appeals process.
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Capital Community Bank of Provo has purchased Security Home Mortgage, headquartered in nearby Orem.
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In a surprise move, the Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and Federal Housing Finance Agency proposed a long-awaited rule to curb certain incentive-based pay arrangements for bank executives.
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