Laurel Road Scores Country Bank for Digital Lending

Laurel Road, a bank that is selling fintech products and services, has scored a sales win, securing Country Bank as a client.

Laurel Bank Road is hitting on a trend: more small banks are considering digital methods for loan underwriting. Larger banks like Bank of America and SunTrust Banks Inc. have recently added digital mortgage lending, and that same interest is spilling over to smaller banks.

Laurel Road, formerly Darien Rowayton Bank, struck the deal to provide its financial technology to Country Bank, which has $700 million of assets. Laurel Road is allowing Country Bank to scale up its  technology to originate loans digitally, Bank Innovation has learned.

Country Bank president Joe Murphy told Bank Innovation that the bank is “working with Laurel Road on offering a white-label loan origination solution.” Terms of the deal were not disclosed.

Based in New York, Laurel Road is a digital bank best known for student loan refinancing. It will work with Country Bank to originate commercial and industrial loans that will range in size from $100,000 to $1 million. Country Bank will also offer personal and small business loans through Lauren Road. The solution will be rolled out by next year, Murphy said. 

“We will own the loan, but Laurel Road will process the loans,” Murphy said.

In other words, Country Bank will determine the creditworthiness of a borrower, while Lauren Road will provide the technology to underwrite that loan. Fintechs working will smaller banks on best-in-class solutions could lead to smaller banks having a better suite of digital offerings than larger FIs.

Laurel Road declined to comment directly on the partnership, but a company spokeswoman told Bank Innovation via email that, “Laurel Road has developed a direct-to-bank sale partner network, allowing banks around the country to acquire high-quality consumer assets.”

“Building off this existing channel, Laurel Road is providing the opportunity for these partners to leverage Laurel Road’s technology infrastructure to offer consumer loan products to both their existing and prospective customer base,” the spokeswoman added.

The deal will allow Country Bank, which specializes in owner-occupied commercial real estate, and acquisition financing, the infrastructure to originate loans digitally. Country Bank’s digital toolkit includes a mobile banking app, online bill pay through Jack Henry and P2P payments through Zelle. The move plays into the technological and innovation strategy of the bank, which has just five branches.

“We’re not on the bleeding edge of technology,” Murphy said. “We wait for the market to develop solutions.”

When asked about why he chose this partner for this solution, Murphy said: “Fintech guys are learning banking, but they don’t have the same sensibility of a bank.”

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