The Dutch based mega bank ING is putting its Canadian operations up for sale with the likely buyer being one of the existing big 6 Canadian banks. The large Canadian banks have the means and the expertise to make the most of this profitable business. The biggest advantage of such a transaction would be lower transaction costs through greater economies of scale, but that would only apply if they could integrate the unique business strategy to the Canadian model.
The unique value proposition of ING Direct is that they have zero transaction fees and fair, no-haggle mortgage rates. ING Direct posts their mortgage rates on their website and offers it to all borrowers including existing customers coming up for renewal. This mortgage rate strategy flies in the face of the banks high posted mortgage rate offers. Offers that can easily be negotiated down with a telephone call, but will bite existing customers in the wallet if they meekly accept the renewal offer.
One less mortgage lender on the Canadian landscape is bad news for homeowners. We already have too few mortgage lenders, a fact that compromises the integrity of the free market. One less mortgage lender will allow for the remaining few to be even more collusive in their fee structures, mortgage rates and policies. If a Canadian bank were to put in an offer for the on-line bank it would be require government regulatory approval, something that should be vehemently opposed for the sake of the Canadian consumer.