Allstate: we like being in banking, makes us money. Govt: new scrutiny/regulations. Allstate: Bye

Allstate Sells Bank to Discover Financial as Regulations Tighten

Feb. 9 (Bloomberg) -- Allstate Corp., the largest publicly traded U.S. home and auto insurer, is exiting the banking business and will sell about $1.1 billion in deposits to Discover Financial Services as regulators increase scrutiny of the industry.

Discover will provide savings accounts, certificates of deposit and money-market products to Allstate customers, the Northbrook, Illinois-based insurer said yesterday in a statement.

Allstate, regulated by state insurance commissioners, has been subject to additional oversight by the Office of Thrift Supervision because of its banking business. The Fed will be taking greater authority over the financial industry after the passage of the Dodd-Frank Act last year.

Allstate Chief Executive Officer Thomas Wilson met in October with representatives of the Federal Reserve Bank of Chicago for a discussion on changes in regulation. Wilson has focused the Allstate Financial unit on life insurance and retirement and investment products.

“That, combined with the changing regulatory environment, led us to the determination that operating Allstate Bank is no longer core to our long-term strategy,” said Matthew Winter, CEO of Allstate Financial, in the statement.

http://www.businessweek.com/news/2011-02-09/allstate-sells-bank-to-discover-financial-as-regulations-tighten.html

Basically: "wait, we can't keep fucking people over as easily as we did? Guess it's time to dump that part of the business."

if we could just get them out of the insurance business, too. I say this as a former customer.

PB