- Today’s main news: LendingClub completes second self-sponsored securitization. Pennsylvania AG sues Navient. Federal regulator clamps down on payday lending. Elevate supports rule on small dollar lending. RateSetter expected to profit next year. China’s pyramid schemes double in 2017. KBRA opens first European office. LendIt leadership changes.
- Today’s main analysis: Funding Circle’s October review.
- Today’s thought-provoking articles: Payday lending’s tough restrictions. Cordray’s remarks on payday lending rule. Three issues Zopa must solve.
- Lending Club completes second self-sponsored securitization.
- Pennsylvania AG sues Navient. AT: “This doesn’t appear to affect Earnest, which Navient recently purchased. But the outcome may. It’s a wait and see.”
- Earnest’s sell to Navient a bad deal for investors.
- Earnest-Navient deal suggests everything old is new again.
- Elevate supports new small dollar lending rule. “Interesting, but not surprising.”
- Federal regulator clamps down on payday lending. AT: “There apparently is no distinction between online and brick-and-mortar payday lenders. Critics say the rules could lead to payday lenders going out of business. They could also lead to payday borrowers defaulting on short-term small-dollar loans thereby making their financial woes even worse.”
- Consumer Finance Protection Bureau (CFPB) is overstepping its bounds. AT: “The battle over the future of this agency is heating up. The CFPB could be a hit discussion item in the next election cycle.”
- Payday lending faces tough new restrictions.
- Richard Cordray’s remarks on payday lending rule.
- New York public pensions profit off banned payday loans.
- Plaintiff complaint against the CFPB. AT: “The actual complaint as filed in the Northern District of Texas.”
- Fifth Third CEO on bank-fintech partnerships.
- Balance Credit expands into California consumer credit market.
- 5 ways to buy a home with a low down payment. AT: “SoFi is offered as one of the options.”
- Ex-Equifax CEO’s testimony deemed insufficient.
- PayPal used for embezzling $1.6M.
- Barclays tests personal finance tool.
- Allrise Financial moves into Reno.
- Snopes verifies online lender boycott of NFL ads.
- RateSetter will return profit next year.
- Funding Circle October review.
- Three issues Zopa must face. AT: “A very good analysis of the struggles Zopa are facing.”
- LendInvest CEO challenges makes bold statement regarding SME builders.
- Lendy seeks IFISA permission, repays largest P2P loan.
- Moneyfarm acquires Ernest.
- Starling Bank to offer business accounts.
- Robots giving financial advice.
- Top 10 buy-to-let postcodes.
- LendIt makes leadership changes. AT: “Congratulations to all.”
- Finastra, R3 + seven banks make blockchain plan.
- How Prodigy Finance helped fund an MBA at London Business School.
- Banks partner with IBM on blockchain-based trade finance.
- Millennials won’t seek financial advice from professionals.
- LoanBit to offer token crowdsale.
- LoanBit — legitimate or scam? AT: “In my attempts to find their location, I hit a snag. It wasn’t easy. This article explains why. Obscuration is usually a bad sign. Do your due diligence.”
- United States
- LendingClub Corp Completes Second Self-Sponsored Securitization (Financials Trend), Rated: AAA
- Pa. attorney general files suit against student-loan company (Philly.com), Rated: AAA
- Online lender Earnest sells to Navient, in a disappointing deal for investors (TechCrunch), Rated: A
- Fintech deal suggests everything old is new again (NASDAQ), Rated: A
- Elevate Expresses Full Support for CFPB Small Dollar Lending Rule (BusinessWire), Rated: AAA
- Federal Regulator Clamps Down on Payday Lending Industry (U.S. News), Rated: AAA
- This Government Agency Is Seriously Overstepping Its Bounds (Fortune), Rated: A
- Payday Lending Faces Tough New Restrictions by Consumer Agency (The New York Times), Rated: AAA
- Prepared Remarks of CFPB Director Richard Cordray on the Payday Rule Press Call (ConsumerFinance.gov), Rated: AAA
- Despite Ban on Payday Lending, Public Pensions Profit from Outlawed Loans (NBC New York), Rated: A
- The Finance Industry’s Complaint Against the Consumer Financial Protection Bureau (U.S. District Court, Northern District of Texas), Rated: A
- Fifth Third Bancorp’s Greg Carmichael Discusses the Relationship Between FinTechs and Banks (The Clearing House), Rated: A
- Balance Credit Expands to California Consumer Credit Market (BusinessWire), Rated: A
- 5 ways to buy a home with a low down payment (KHOU.com), Rated: B
- Lawmakers Call Ex-Equifax CEO’s Testimony Insufficient (Law360), Rated: A
- Ex-Bookkeeper Stole $ 1.6M From NJ Co. Via PayPal (Law360), Rated: B
- Barclays US tests personal finance tool (Banking Technology), Rated: B
- Allrise Financial moves into downtown Reno (Northern Nevada Business Weekly), Rated: B
- Did the CEO of Hardwick Clothes Cut Ties With the NFL Over ‘Unpatriotic’ Protests? (Snopes), Rated: B
- United Kingdom
- RateSetter will return to profit next year, says CEO (P2P Finance News), Rated: AAA
- Your October Review – Insight and Analysis (Funding Circle), Rated: AAA
- From peer-to-peer to here: Three issues that Zopa must solve (AltFi), Rated: AAA
- LendInvest CEO Christian Faes Challenges Government to Back SME Builders: Game On (Crowdfund Insider), Rated: A
- Online Lender Lendy Seeks IFISA Permission & Announces Repayment For Largest P2P Loan (Crowdfund Insider), Rated: A
- Digital wealth manager Moneyfarm acquires tech behind fintech chatbot Ernest (TechCrunch), Rated: A
- Starling Bank expands to offer business accounts (Banking Technology), Rated: A
- Can a robot give financial advice? (Which?), Rated: B
- Where are the top 10 buy-to-let postcodes? (Bridging&Commercial), Rated: B
- Pyramid scheme investigations in China double during 2017 (NASDAQ), Rated: AAA
- European Union
- Rating agency opens in Europe (Structured Credit Investor), Rated: AAA
- MyBucks Named ‘Best Financial Inclusion Company’ at European FinTech Awards 2017 (Next Billion), Rated: B
- Leadership Changes at LendIt (Lend Academy), Rated: AAA
- Finastra, R3 and seven banks have blockchain plan (Banking Technology), Rated: A
- How Prodigy Finance Helped Fund My MBA At London Business School (Business Because), Rated: A
- Banks team up with IBM in trade finance blockchain (Financial Times), Rated: B
- Millennial Money: We’re not willing to pay to keep our finances in check (Stuff), Rated: A
- Blockchain Driven P2P Lending & Investment Platform Announces Crowdsale (Coin Idol), Rated: B
- LoanBit – Legit Bitcoin Lending Interest Rates & Earning Platform? (Bitcoin Exchange), Rated: A
- P2P lending norms will bring order to industry, but speed bumps ahead (VC Circle), Rated: AAA
- P2P lending platforms to get transparent, safer (Business-Standard), Rated: A
- What peer-to-peer lending is and how RBI’s guidelines will impact it (Financial Express), Rated: B
- Student micro-financing startup SlicePay raises Series A round (VC Circle), Rated: A
- YES BANK launches second cohort of YES FINTECH accelerator (YourStory), Rated: A
LendingClub Corp Completes Second Self-Sponsored Securitization (Financials Trend), Rated: AAA
LendingClub Corp (NYSE:LC), America’s leading web marketplace connecting investors and borrowers, has contributed to and sponsored its second securitization contract. The Consumer Loan Underlying Bond Credit Trust 2017-P1 released $323.1 million in prime notes supported by consumer loan assets enabled through the LendingClub platform. It marks as the sixth securitization sponsored or supported by company, and the fourth rated securitization of company facilitated loans overall.
This deal was backed by around $350 million of collateral and comprises $217.3 million of Class ‘A’ notes rated “A-(sf)”, $51 million of Class ‘B’ notes rated “BBB (sf)” and Class ‘C’ notes worth $54.7 million rated “BB (sf)”. All ratings were given by Kroll Bond Rating Agency, Inc.
Pa. attorney general files suit against student-loan company (Philly.com), Rated: AAA
The Pennsylvania Attorney General’s Office filed suit Thursday against Navient, the largest U.S. student-loan servicer, alleging widespread abuses and deceptive acts involving its administration of student loans.
The suit against Navient Corp. and its subsidiary Navient Solutions LLC, formerly a part of Sallie Mae, could affect hundreds of thousands of Pennsylvanians, Attorney General Josh Shapiro said, adding that the office is seeking restitution for all borrowers affected by the practices.
That includes anyone who received private student loans from Sallie Mae or who has had federal or private student loans serviced by Navient and has had problems with repayment.
The Wilmington-based company, which has a large servicing center in Wilkes-Barre, already is the subject of a federal lawsuit filed this year by the Consumer Financial Protection Bureau (CFPB). Washington state and Illinois also have sued the company.
Pennsylvania residents have filed 1,059 complaints against Navient with the CFPB as of September, the Attorney General’s Office said.
Online lender Earnest sells to Navient, in a disappointing deal for investors (TechCrunch), Rated: A
Earnest, a well-funded fintech startup with bold ambitions to create a modern financial institution, is selling to the student-loan company Navient for $155 million in cash.
The exit isn’t so great for Earnest’s investors. They’d plugged roughly $320 million in cash and debt into the company, which was initially centered around providing small loans to people based on their earning potential and evolved over time to provide personal loans to a broader base of customers, as well as lend money to coding academies, as it told TechCrunch in late 2015.
Fintech deal suggests everything old is new again (NASDAQ), Rated: A
Everything old is new again in finance. Navient, which services debt, is buying startup student-loan refinancer Earnest for less than half its 2015 valuation. Even then, it’ll eat into the new owner’s earnings and share buybacks. Worse, Navient faces a fresh lawsuit over dodgy practices.
The Pennsylvania attorney general’s office filed charges on Thursday that follow ones from the U.S. Consumer Financial Protection Bureau in January with Illinois and Washington. All allege that Navient in some way or other cheated borrowers paying for college, which the company denies.
Earnest’s $155 million price tag suggests most in the industry have downgraded their expectations about profitable growth.
Navient shares tumbled 12 percent, erasing market value more than three times the value of the acquisition.
Elevate Expresses Full Support for CFPB Small Dollar Lending Rule (BusinessWire), Rated: AAA
Ken Rees, CEO of Elevate Credit, Inc. (“Elevate”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, issued the following statement in response to the final “small dollar lending” rule issued today by the Consumer Financial Protection Bureau (CFPB):
“We applaud the CFPB, and we fully support this rule. We believe this rule is good for consumers and for the business we have built to better serve them. The small dollar rule protects consumers from the cycle of debt inherent in payday loans, short-term auto title loans, and certain balloon payment loans, and it encourages the kind of innovation we’re doing in underwriting, pricing and product development. We are heartened that regulatory uncertainty has been lifted with today’s announcement. Our current view is that the rule requires minimal or no changes to our business.”
Federal Regulator Clamps Down on Payday Lending Industry (U.S. News), Rated: AAA
Payday and auto title lenders will have to adhere to stricter rules that could significantly curtail their business under rules finalized Thursday by a federal regulator. But the first nationwide regulation of the industry is still likely to face resistance from Congress.
The Consumer Financial Protection Bureau’s rules largely reflect what the agency proposed last year for an industry where the annual interest rate on a payday loan can be 300 percent or more. The cornerstone is that lenders must now determine before giving a loan whether a borrower can afford to repay it in full with interest within 30 days.
Because studies by the CFPB have found that about 60 percent of all loans are renewed at least once and that 22 percent of all loans are renewed at least seven times, this cap is likely to severely wound the industry’s business model. In California, the largest payday loan market, repeat borrowers made up 83 percent of the industry’s loan volume.
The CFPB estimated that loan volume in the payday lending industry could fall by 55 percent under the new rules.
Roughly 12 million people took out a payday loan in 2010, according to the Pew Charitable Trusts.
In addition to the “full payment test” and the limits on loan renewals, the CFPB rules would also restrict the number of times a payday lender can attempt to debit a borrowers’ account for the full amount without getting additional authorization.
This Government Agency Is Seriously Overstepping Its Bounds (Fortune), Rated: A
The Consumer Financial Protection Bureau (CFPB) has a mission: to protect consumers from unfair, deceptive, or abusive practices. According to a new national poll by the Cato Institute in collaboration with YouGov, protection from deceptive practices is just what the American public wants. Asked to prioritize regulatory goals, the majority of respondents put “protect consumers from fraud” front and center.
Unfortunately, the CFPB continually misses the mark, issuing rules that make splashy headlines but in practice do little to stop bad behavior. Its latest proposed rule, expected to become final soon, doesn’t target fraud itself. Instead, it goes after an entire industry and will significantly reduce consumers’ access to credit at the exact moments they need it most.
As the Cato poll finds, the majority of payday borrowers say they receive good information about rates and fees from their payday lenders.
Payday Lending Faces Tough New Restrictions by Consumer Agency (The New York Times), Rated: AAA
The operators of those stores make around $46 billion a year in loans, collecting $7 billion in fees. Some 12 million people, many of whom lack other access to credit, take out the short-term loans each year, researchers estimate.
Industry officials said on Thursday that they would file lawsuits to block the rules from taking effect in 2019 as scheduled.
Under the new rules, lenders would be allowed to make a single loan of up to $500 with few restrictions, but only to borrowers with no other outstanding payday loans.
A dropoff of that magnitude would push many small lending operations out of business, lenders have said. The $37,000 annual profit generated by the average storefront lender would become a $28,000 loss, according to an economic studypaid for by an industry trade association.
Prepared Remarks of CFPB Director Richard Cordray on the Payday Rule Press Call (ConsumerFinance.gov), Rated: AAA
After a long process of research, outreach, and review of over one million public comments, the Consumer Bureau today has issued a rule aimed at stopping debt traps on payday and auto title loans. The rule is guided by the basic principle of requiring lenders to determine upfront whether people can afford to repay their loans. These strong protections cover loans that require consumers to pay all or most of the debt at once, including payday loans, auto title loans, deposit advance products, and longer-term loans with large “balloon” payments. The new rule also curtails repeated attempts to debit checking accounts that rack up fees and make it harder for consumers to get out of debt. This provision applies to the same kinds of loans and to high-cost installment loans as well. These protections bring needed reform to a market where far too often lenders have succeeded by setting up borrowers to fail.
Loans like these are heavily marketed to financially vulnerable consumers. Though they offer cash-strapped consumers access to credit, the full-payment requirement can make these loans unaffordable.
More than four out of five payday loans are re-borrowed within a month, usually right when the loan is due or soon thereafter. In fact, about one-in-four initial payday loans are re-borrowed nine times or more, as consumers pay far more in fees than they borrowed in the first place. Just like payday loans, the vast majority of single-payment auto title loans are rolled over or re-borrowed on the day they come due or soon thereafter. And one-in-five borrowers end up having their car or truck seized by the lender because they cannot repay the debt.
Our research has shown that the business model for payday and auto title lenders is built on miring people in debt.
The new rule also addresses how lenders extract loan payments from consumers’ accounts. This part of the rule covers short-term loans, balloon loans, and high-cost longer-term loans where the lender has account access. After two straight unsuccessful attempts, the lender cannot debit the account again unless it gets a new authorization from the borrower. In addition, lenders must notify consumers in writing before attempting to debit an account at an irregular time or for an irregular amount.
The final rule issued today applies the underwriting requirements only to lenders of short-term and balloon-payment loans. This is a change from our proposal, which would have required underwriting for a wider swathe of longer-term loans. We want to take more time to consider how the longer-term market is evolving and the best ways to address practices that are currently of concern and others that may arise as the market responds to the reforms prompted by this new rule.
The Bureau has spent five years developing this rule.
Despite Ban on Payday Lending, Public Pensions Profit from Outlawed Loans (NBC New York), Rated: A
Short-term, high-interest debt known as payday loans are illegal inside New York borders. But that hasn’t stopped state and city retirement funds from investing more than $40 million in payday lenders that operate in other states.
The Finance Industry’s Complaint Against the Consumer Financial Protection Bureau (U.S. District Court, Northern District of Texas), Rated: A
Read the full complaint here.
Fifth Third Bancorp’s Greg Carmichael Discusses the Relationship Between FinTechs and Banks (The Clearing House), Rated: A
This environment presents challenges to introducing technologies, products, or services. If we have an issue, we can’t advance the products or services. A zero-tolerance regulatory environment puts constraints on products and services that we may like to get into the marketplace. For instance, small dollar lending has been problematic. As you know, Jim, small-dollar lending is a very important product for our customers. Many customers are regularly going out to payday lenders, title loans, and pawn shops to get short-term access to dollars.
When you look at the amount of capital you have to hold, and the underwriting requirements for a small business loan versus a larger loan, the cost is the same. It makes it more difficult to serve small businesses, and you see small business lending by banks being significantly reduced over what you saw pre-crisis.
This partnership has already helped us form relationships with companies like GreenSky, ApplePie Capital, Transactis, and AvidXchange. This has enabled Fifth Third to accelerate our innovation in those different areas, whether it is unsecured lending, small business franchise lending, or accounts payable automation.
Well, the interesting thing with FinTechs is that most of them need a bank as a partner to be successful.
GreenSky doesn’t exist, Lending Club doesn’t exist, OnDeck doesn’t exist without liquidity and the safe harbor banks provide for the asset. Partnerships between a bank and a FinTechs are a potential strong win for our customers and a win for our banking shareholders because we’re more efficient in how we deliver innovative products and services.
Our $30 billion community commitment focuses on supporting low- to moderate-income borrowers. $11 billion of our five-year commitment is dedicated to mortgage lending; $10 billion is for small business lending; and $9 billion is for community development lending and investments.
Balance Credit Expands to California Consumer Credit Market (BusinessWire), Rated: A
Balance Credit, a leading online lender whose analytics and technology-driven solutions have enabled nearly $100 million in credit access for underserved Americans, has expanded its personal loan offering to residents of California. The expansion will allow Balance to assist the estimated 26 percent of Californians who are currently underserved by mainstream banking products. With the launch in California, Balance has expanded its geographic coverage from 19% to 31% of US consumers.
With today’s news, California marks the 9th state where Balance Credit operates, including Delaware, Missouri, New Mexico, Ohio, South Carolina, Texas, Utah, and Wisconsin.
5 ways to buy a home with a low down payment (KHOU.com), Rated: B
In fact, the average down payment, according to the National Association of Realtors, has been 6 percent for the last three years.
What do you do if you don’t have 20% lying around?
SoFi. SoFi is new to the mortgage lending space, but it’s setting itself apart in a big way. It accepts borrowers with a 10 percent down payment, but they primarily target borrowers with higher FICO Scores — think 700+. On the bright side, they do not charge mortgage insurance. In fact, SoFi doesn’t charge any loan origination, application or broker commission fees.
Lawmakers Call Ex-Equifax CEO’s Testimony Insufficient (Law360), Rated: A
House lawmakers on Thursday sharply questioned the former chairman and chief executive of Equifax Inc. over a massive data breach that left more than 145 million Americans’ personal information exposed, raising questions about why he had appeared to testify as opposed to current executives.
Appearing in his fourth congressional hearing over a three-day span, former Equifax Chairman and CEO Richard Smith faced a flurry of questions over the details of the breach, including over curious stock trades by top company executives just before the breach was made….
Ex-Bookkeeper Stole $ 1.6M From NJ Co. Via PayPal (Law360), Rated: B
Pennsylvania federal prosecutors Thursday filed an indictment charging a Philadelphia man with using PayPal to embezzle $1.6 million from his former employer, a New Jersey company that sells products for the cellular phone industry.
Peter Goodchild, 54, who was a bookkeeper at the Florham Park, New Jersey-based QwikSource LLC, allegedly pilfered the funds over a 10-year period. He also faces charges of money laundering, aggravated identity theft and filing false income tax returns.
Barclays US tests personal finance tool (Banking Technology), Rated: B
Barclays US is dipping its toe into the financial health business, testing a personal financial management tool that aggregates all of a customer’s Barclays credit cards, personal loans and savings products – as well as accounts with other banks – in one place, reports Banking Technology‘s sister publication Paybefore.
This new service, My Personal Bank, which will be announced soon, is embedded in the bank’s credit card mobile app.
Allrise Financial moves into downtown Reno (Northern Nevada Business Weekly), Rated: B
Allrise Financial Group has leased 5,500 square feet at 200 S. Virginia Street in Reno.
Did the CEO of Hardwick Clothes Cut Ties With the NFL Over ‘Unpatriotic’ Protests? (Snopes), Rated: B
In September 2017, Tennessee businessman and CEO of Hardwick Clothes Allan Jones withdrew all NFL-related advertising for his companies, in response to “unpatriotic” national anthem protests.
On 26 September 2017, Jones, who also owns Buy Here Pay Here U.S.A. and U.S. Money Shops, posted a screenshot to his Facebook page showing an email instructing his ad-buyer to stop any commercials for his companies from being broadcast during NFL games.
RateSetter will return to profit next year, says CEO (P2P Finance News), Rated: AAA
RATESETTER will return to profit next year, its chief executive and co-founder has said.
The peer-to-peer lender was profitable in the financial years ended 2014 and 2015, but has fallen into the red since then, as it has invested heavily into scaling up the business.
The ‘big three’ platform published a recording of a recent speech by Rhydian Lewis (pictured) on its website on Thursday, in which he underlined his belief that RateSetter is a “sustainable and profitable model”.
Your October Review – Insight and Analysis (Funding Circle), Rated: AAA
Last month Funding Circle investors, like you, lent over £100 million to UK businesses to help them grow and develop.
September industry news
Thanks to investors, last year over £1 billion was lent to 10,000 businesses through Funding Circle, helping to create 25,000 new jobs.
We recommend lending £2,000 or more, so you can lend to 100+ businesses, with no more than 1% going to each one.
From peer-to-peer to here: Three issues that Zopa must solve (AltFi), Rated: AAA
Zopa is the world’s original peer-to-peer lending platform and the biggest consumer-focused platform in the UK. It has also been closed to new investors for the better part of eight months. The reason is explicitly that it cannot find enough new borrowers. Demand for its loans among existing investors is more than sufficient to match demand on the other side of the marketplace. For this reason, Zopa‘s Innovative Finance ISA has largely been an exercise in tax efficiently wrapping money that it already had on the platform.
A more meaningful initiative in the platform’s ongoing plight to attract borrowers might be its latest partnership with Saffron Building Society. This, for the first time in Zopa’s 12 year history, brings it into branches. Its loans will now be made available to Saffron’s 90,000 customers in any of its 11 branches across Hertfordshire, Essex and Suffolk, as well as via the building society’s website. Applicants can expect a quote within minutes.
Zopa may well have a bright future, but in the short-term it seems to me that it has three core issues that it must iron out:
- Finding new origination channels in order to open to new customers once more, capitalise on the IFISA opportunity and take advantage of the cost benefits of deposit funding.
- Meaningfully speed up whatever is delaying loan sales on the platform.
- Find a way to maintain an attractive risk-premium for its P2P investors.
LendInvest CEO Christian Faes Challenges Government to Back SME Builders: Game On (Crowdfund Insider), Rated: A
“There are five times fewer small scale developers today than in the last housebuilding boom and not a single one of today’s top ten housebuilders was created before 1990. There is a clear monopoly in the sector,” clarified LendInvest Co-Founder & CEO Christian Faes.
Online Lender Lendy Seeks IFISA Permission & Announces Repayment For Largest P2P Loan (Crowdfund Insider), Rated: A
UK-based peer-to-peer property platform Lendy is currently seeking permission to launch an innovative finance ISA (IFISA). This news comes just after the online lender announced its 2016 earnings and additional growth plans.
Meanwhile, Lendy also announced the repayment of its largest p2p loan. Bridge and Commercial reported that the loan, which was secured against former the Kentish Town Studios building in North London, has been repaid in full 21-days ahead of schedule and even returned a gross 12% per annum in interest.
Digital wealth manager Moneyfarm acquires tech behind fintech chatbot Ernest (TechCrunch), Rated: A
Moneyfarm, the U.K.-headquartered “digital wealth manager” has acquired the technology behind personal finance chatbot Ernest. Terms of the deal aren’t being disclosed, though I understand that, along with the tech, this is an acqui-hire of sorts, seeing London-based Ernest’s CTO Lorenzo Sicilia join Moneyfarm to oversee technology integration.
Starling Bank expands to offer business accounts (Banking Technology), Rated: A
Starling Bank, one of the first banking challengers to offer a mobile-only current account in the UK, is expanding into the business market.
The Starling for Business account will initially be for entrepreneurs, sole-traders, and small business owners. The aim is to offer “fast, secure, and flexible” ways of managing business finance from mobile.
Can a robot give financial advice? (Which?), Rated: B
New guidance setting out how artificial intelligence services can give streamlined financial advice has been published by the Financial Conduct Authority (FCA).
Some of the most popular include:
- Nutmeg: an online service that suggests a diversified investment portfolio tailored to the personal information you provide. Nutmeg will continually rebalance your portfolio in line with your risk profile, unless you change your preferences.
- BestInvest: a platform to manage your investments online, offering research and analysis tools. Further advice is provided via phone by advisers.
- RPlan: a tool for DIY investors, with the choice to choose, track and review investments online.
- Barclays Financial Personality Assessment: this tool helps you identify your attitude towards risk and your composure levels. Users can then work with an adviser to build a portfolio.
Robo-advice on mortgages
Aside from investing advice, online services are also helping people make another major financial decision – applying for a mortgage.
A handful of robo-advisers for mortgages are currently operating in the UK market – Trussle and Habito are both up and running, while MortgageGym was granted a license from the FCA earlier this year.
Saving by app
- Chip is a smartphone app which analyses your spending patterns and automatically transfers your money into a savings account, based on what it thinks you can add afford to save. While its standard interest rate is 1% AER, users can earn up to 5% AER by referring friends to the app.
- Plum operates in a similar way, analysing your transactions and recommending savings, though it communicates via Facebook Messenger.
- Cleo analyses your spending and suggests improvements to help you save more, but it won’t move your money for you.
Where are the top 10 buy-to-let postcodes? (Bridging&Commercial), Rated: B
Luton has held off Colchester to remain top of the LendInvest buy-to-let index, while Manchester has broken into the top three amid increasingly stronger metrics in northern markets.
The top 10 buy-to-let postcodes
The bottom 10 buy-to-let postcodes
Pyramid scheme investigations in China double during 2017 (NASDAQ), Rated: AAA
The number of pyramid schemes investigated by Chinese police more than doubled in the first nine months of the year, with cases involving nearly 30 billion yuan ($4.5 billion), the official Xinhua News Agency said on Thursday.
Police investigated 5,983 schemes from January through September, an increase of 118 percent, with internet-based pyramid schemes on the rise, many involving virtual currencies, according to the report which cited the Ministry of Public Security.
Rating agency opens in Europe (Structured Credit Investor), Rated: AAA
KBRA has opened its first European office, located in Dublin, Ireland, and intends to expand into further jurisdictions (SCI passim). Several new hires and some existing staff will support the European effort, which will have a concerted focus on infrastructure and aviation securitisation, along with traditional core business areas.
MyBucks Named ‘Best Financial Inclusion Company’ at European FinTech Awards 2017 (Next Billion), Rated: B
Luxembourg-based and Frankfurt-listed fintech, MyBucks S.A., was announced as the winner of the Award for ‘Best European Financial Inclusion Company’ at the European Fintech Awards 2017 taking place in Brussels, Belgium.
Leadership Changes at LendIt (Lend Academy), Rated: AAA
LendIt events today look and feel very different from our early events. Along with that LendIt as an organization has grown and matured. Last month we made some internal changes that I want to share with you here.
My partner Jason Jones, who has been the driving force in the growth of our business, took over the CEO role some time ago as the business became more complex.
As of early September, Jason has transitioned out of the CEO role and is now Co-Chairman along with me. This allows him to focus his entrepreneurial drive on areas of our business where he can make the most impact. He is turning his attention to become more client focused as major global financial services and technology companies become more involved in our business.
Bo Brustkern, who has until recently stayed in the background, is now taking on the mantle of CEO of LendIt.
Similarly, we have promoted Joy Schwartz, our longtime head of operations, to become President of LendIt.
Finastra, R3 and seven banks have blockchain plan (Banking Technology), Rated: A
Underpinned by Corda, R3’s distributed ledger technology (DLT) based platform, Fusion LenderComm exposes real-time credit agreement, accrual balances, position information and transaction data to lenders, from agent bank loan servicing platforms such as Finastra’s Fusion Banking Loan IQ.
How Prodigy Finance Helped Fund My MBA At London Business School (Business Because), Rated: A
Determined to boost her business skills and gain more international exposure, Argentinian Amelia Martinez decided to pursue an MBA at London Business School (LBS).
Coming from a developing country with high levels of inflation and currency fluctuations, she faced many hurdles funding her MBA, particularly when new government restrictions were imposed preventing her from taking money out of her country to pay for the last instalment of her tuition.
With a Prodigy Finance loan however, she was able to pay for and complete her degree. Having completed her MBA at LBS, she’s since gone on to work for the company that helped her do it.
Banks team up with IBM in trade finance blockchain (Financial Times), Rated: B
A group of banks are teaming up with IBM to build a new global system for trade finance using blockchain technology that is designed to track goods and automatically release payments as they move around the world by plane, ship or truck.
Bank of Montreal, Caixabank, Erste Bank and Commerzbank are joining the project called Batavia, which was launched by UBS and IBM last year and aims to start testing the technology using real transactions by early next year.
Millennial Money: We’re not willing to pay to keep our finances in check (Stuff), Rated: A
A 2014 survey by global investment banking company UBS found millennials preferred to seek advice from their friends rather than a professional.
Most millennials, like older generations, first looked to a spouse or partner for financial advice. Their next choice is their parents, followed by friends and other family members.
Non-millennials were much bigger champions of financial advisors: 40 per cent of non-millennial respondents reported seeking advice from one as their first port of call on a financial decision, while only 14 per cent of millennials said the same.
Blockchain Driven P2P Lending & Investment Platform Announces Crowdsale (Coin Idol), Rated: B
The crowdsale for the platforms ‘LoanBit Token (LBT)’ is scheduled to go live in November, with a presale beginning on 4th October 2017, and ending on 15th October 2017.
The ICO for LoanBit is set to go live on in November and will be open for only 31 days.
LoanBit – Legit Bitcoin Lending Interest Rates & Earning Platform? (Bitcoin Exchange), Rated: A
LoanBit is a lending platform created by an Australian startup called LoanBit Proprietary Limited. The platform is designed to work as a mediator between bitcoin lenders and businesses looking for short-term loans in bitcoin.
LoanBit promises to offer you a guaranteed daily interest rate of 2% to 5%, which adds up to triple or quadruple digit guaranteed returns per year. You can invest in LoanBit for as little as 0.01 BTC.
LoanBit claims to be a legitimately registered Australian company. The company lists an address in Canberra (17/7-17 Bunda St). They also have an Australian company number (610 418 794).
In any case, the LoanBit.net website was registered on February 16, 2017. The latest version of the website, which features the HYIP scam, only appeared online on September 10, 2017 – so it’s brand new.
Yes, LoanBit appears to be a scam, based on all of the information we can find online today.
P2P lending norms will bring order to industry, but speed bumps ahead (VC Circle), Rated: AAA
India’s P2P lending market, which is predicted to be worth $4-5 billion by 2023 according to community loan exchange platform Faircent, has several players operating in the space, such as LenDenClub, Monexo, BillionLoans, i-Lend, LoanMeet, i2iFunding and FinMomenta. However, so far, P2P lending had been operating in a regulatory grey area. As such, the rollout of these guidelines gives legitimacy to the business.
FinMomenta co-founder and CEO Brahma Mahesh Khaderbad believes it paves the way for P2P platforms to gain legality, transparency and credibility.
The RBI has said that every company seeking registration should have a net-owned fund of not less than Rs 2 crore.
The guidelines say that any fund transfer between participants on a P2P lending platform shall be through an escrow account, which will be operated by a trustee. At least two escrow accounts, one for funds received from lenders and pending disbursal, and the other for collections from borrowers, shall be maintained.
The central bank has said that the aggregate exposure of a lender to all his/her borrowers at any point, across all P2Ps, should be capped at Rs 10 lakh. The aggregate loans taken by a borrower at any point of time, across all P2Ps, has also been capped at the same amount. The exposure of a single lender to the same borrower, across all P2Ps, shall not exceed Rs 50,000.
Read more on the guidelines here.
P2P lending platforms to get transparent, safer (Business-Standard), Rated: A
The norms on peer-to-peer (P2P) lending platforms issued by the Reserve Bank of India (RBI) will help make them more transparent and also safer for customers. “The regulations ensure that P2P platforms will protect the interests of lenders and borrowers will get faster access to credit,” says Shankar Vaddadi, founder and director of i-lend.
What peer-to-peer lending is and how RBI’s guidelines will impact it (Financial Express), Rated: B
The RBI said P2P lending, even though of no significant in value, yet can “disrupt the financial sector and throw up surprises” in future, and the associated risks to the financial system are “too important to be ignored”.
The RBI has laid down following criteria for registering under Non-Banking Financial Companies (NBFC) :
- P2Ps should have a minimum Rs 2 crore capital
- P2Ps cannot take any loan exposure themselves
- P2P will undertake credit assessment and risk profiling of the borrowers and lenders
- P2P will maintain documents related to loan agreements
- P2P will provide assistance in disbursement and repayments of loan amount
- P2Ps cannot hold balance sheet or funds
- P2Ps cannot cross-sell products except for some insurance products
“This is an extremely positive step for the P2P lending business. The retail millennial lenders, an investor demographic which has been focussed on extensively in the regulations will be leveraging the power of the crowd for the benefit of small
borrowers,” Vinay Mathews, Founder & COO, Faircent.com said.
Student micro-financing startup SlicePay raises Series A round (VC Circle), Rated: A
SlicePay, a digital payment platform catering to college students, has raised $2 million (about Rs 13 crore) in a Series A round from Japanese investment fund Das Capital and Russian early-stage investor Simile Venture Partners, its co-founder told VCCircle.
Existing investor Blume Ventures also participated in the round.
YES BANK launches second cohort of YES FINTECH accelerator (YourStory), Rated: A
YES BANK, India’s fifth-largest private sector bank, has been significantly contributing to the fintech space by collaborating with and mentoring more than 100 fintech startups to co-create innovative financial solutions for its Corporate, SME, and retail customer base. In March this year, they launched a business accelerator programme for fintech startups called YES FINTECH, in association with T-Hub, Anthill, and LetsTalkPayments.
YES BANK is all set to launch the second cohort of YES FINTECH, which will kick off on November 13.
The YES FINTECH roadshow in Mumbai will include a Fireside Discussion on GES (Global Entrepreneurship Summit) and its impact on Fintech and Mumbai as India’s Fintech Hub. In conversation will be Amit Goel, Founder LTP, Puneet Shukla, NITI Aayog and Vivek Belgavi, Partner, PwC. After this, Rajeev Chari, COO, Numberz and Arpit Ratan, Founder, Signzy, both startups that graduated from the Summer Cohort of YES FINTECH, will share their experience of being a part of the programme.
When: 6th October
Where: ISME Ace, One India Bulls, Lower Parel, Mumbai
Time: 2 pm-5pm
The YES FINTECH roadshow in Bengaluru will begin with a GES lead-up panel discussion on ‘Women in Fintech. Panellists will include Lizzie Chapman from Zestmoney, Prashanthi Reddy from YES BANK and Dr. Anna Roy of NITI Aayog. Following this, Shankar, Founder, FRS Labs, and Ankit Ratan, Founder, Signzy, both startups that graduated from the Summer Cohort of YES FINTECH, will share their experience of what it was to participate in the programme.
When: 11th October
Where: 91 Springboard, 8th Block Koramangala, Bengaluru
Time: 2 pm-5pm