The latest insurance company to leave banking behind is Shelter Insurance of Columbia, Mo., and the insurer blames the Dodd-Frank reform law.
"Shelter follows other insurance companies that have bailed on banking in the past two years, including MetLife (MET) and Allstate (ALL). MetLife has said that its decision in 2011 to sell its bank involved 'regulations written for banking institutions.'" writes American Banker's Andy Peters.
Ron Wheeling, chief executive of Shelter Financial Bank, said it was no longer cost-effective to run a bank given the higher expenses associated with the Dodd-Frank Act.
"We were a very soundly run, profitable, growing bank that provided great rates and services," Wheeling says. "The government is putting us out of business."
The reform law would have required Shelter to provide the Federal Reserve Board with financial statements using "full-accrual" generally accepted accounting principles, Wheeling says.
The insurer brought the issue of higher costs to light with the Fed, but according to Wheeling, the regulator did not budge.
Wheeling also claimed Dodd-Frank's Volcker Rule would hurt Shelter's capacity to serve as the holding company for Shelter Financial.
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