Citizens Bank has filed a lawsuit against SoFi Bank, accusing the fintech competitor of poaching its loan officers and loan pipelines. The case highlights the ongoing battle for mortgage talent and business in the industry.
The Rhode Island-based bank alleges that SoFi induced more than 30 loan officers and other mortgage staff to breach their confidentiality and non-solicitation agreements when they left. Citizens is pursuing a civil RICO claim, a rare federal poaching complaint between banks in the mortgage space. The lawsuit was first reported by Law360.
Allegations of a Nationwide Campaign
Citizens describes SoFi’s actions as a “nationwide campaign” that severely impacted its operations, particularly in the Tri-State area. According to the complaint, “Here in Connecticut, SoFi has decimated Citizens’ mortgage business and essentially eliminated its market presence.” The bank claims that employees poached from its Connecticut branch were responsible for $5 million in revenue in the year before SoFi’s alleged actions.
A spokesperson for Citizens declined to comment, while a representative for SoFi did not respond to a request for comment.
Details of the Lawsuit
The suit, which does not name individual employees as defendants, accuses SoFi of poaching marketing managers and other home lending professionals across nine states over the past two years. These workers allegedly took information including client and loan data, referral databases, and pricing models, in violation of their employment agreements.
The purported campaign began in 2024 when a Citizens executive vice president in its consumer lending department left for a similar position at SoFi. Employees were allegedly lured by SoFi’s promises to expand their mortgage business.
Citizens is also suing SoFi for misappropriation of trade secrets and is seeking injunctive relief from a Connecticut federal court to prevent SoFi from using the allegedly stolen information.
Background on the Companies
SoFi is a significant home equity loan originator and has reported billion-dollar origination volumes in recent quarters, including $1.4 billion in mortgages in the second quarter, according to its earnings. Citizens, a retail and correspondent lender, does not publish its specific residential mortgage volume and ended its wholesale operations in 2023.
RICO claims against real estate companies have been infrequent in recent years and rarely go to trial. More lenders have secured settlements in trade secrets cases, though some remain pending after years of litigation.