The changes in the industry's corporate structure have been accompanied by equally far reaching changes in the composition of bank portfolios, and these changes also have important CRA implications. Specialization is increasingly the rule in the industry, as financial institutions, of all sizes, drop or outsource product lines in which they lack resources or critical mass, choosing to focus instead on those product lines in which they command significant market share. In keeping with the growing emphasis on fee income, banks are also holding fewer and fewer of the loans they originate and securitizing more of them to others. The mortgage business is one example of this change. Many banks are leaving the mortgage business, and some of those that remain are originating fewer loans through their own offices, turning increasingly to mortgage brokers.
Credit cards offer perhaps the most vivid illustration of the trend toward product concentration.
Eighty percent of all Americans now carry at least one bank card, and increasingly, the cards they're carrying are from the same banks. In just the last ten years, the top ten issuers of Visa and MasterCard saw their market share increase from 51 percent to 82 percent, with the top five accounting for nearly 57 percent of the total market. Last year alone, more than four percent of all credit card receivables were sold by smaller issuers to larger ones, with the top two issuers taking almost 80 percent of that business. While the big keep getting bigger, many of the others are dropping out of the race altogether. Under the current framework, the CRA lending test is weighted most heavily in formulating a large retail institution's summary rating.