Bank Leumi Unit Spins Off Retail Loan Operations
Bank Leumi Trust Co., the U.S. unit of Israel's Bank Leumi, has joined a small but growing number of banks and thrifts that farm out their consumer loan processing and collection.
The $3.2 billion-asset bank, which is based in New York, said that it had signed an "outsourcing" contract with CLS Corp., Blue Bell, Pa.
CLS will perform all consumer lending administrative services, including loan application processing, credit underwriting, payment processing, collection, settlement, and customer service.
$750 Million Serviced
Walt Whitehill, vice president for sales and marketing at CLS, said Bank Leumi's $50 million portfolio brings to $750 million the amount of loans serviced by CLS. The company expects to service over $1 billion by yearend.
CLS, founded five years ago, services home equity, automotive, and personal loans for 35 community banks and thrifts, including 10 thrifts held by the Resolution Trust Corp.
The Pennsylvania company processes loans for banks at a cost of 0.78% of outstanding loans - compared with the 2.5% to 3% it costs banks that do the work themselves, Mr. Whitehill said.