Following up on its recent announcement that it would purchase a depository (MBSL 6/19/00), Countrywide Credit Industries is acquiring a small national bank in Washington, D.C. and has applied to the Federal Reserve Board to become a financial holding company.

Among other goals, having a business arm that is a depository would allow Countrywide to access the Federal Home Loan Banks' Mortgage Partnership Finance (MPF) program, which offers excellent execution for Federal Housing Administration loans.

"While maintaining a home-centric focus, this new initiative will help increase our customer retention and expand our array of products and services. It is the next logical step in our evolution into a one-stop financial services company," said Countrywide chairman and chief executive Angelo Mozilo.

Countrywide has applied to the Office of the Comptroller of the Currency to acquire Treasury Bank, which has $111.2 million in assets. The bank primarily makes mortgage loans and offers its customers certificates of deposits and money market accounts.

Countrywide Home Loans is the nation's largest non-depository mortgage banker. Faced with intense competition from banks and thrifts that can leverage their servicing receivables 8 to 1 (as opposed to Countrywide's 2 to 1), Countrywide - among other things - hopes to diversify its source of funding by owning a depository.

It still remains to be seen whether or not Countrywide will still consider a sale. Already, it has been reported that Citigroup, New York, and Washington Mutual have spoken to the company about a possible acquisition. - AT

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