Thursday November 7 2019, Weekly News Digest

Lending Club

News Comments Today’s main news: Prosper launches HELOCs with BBVA. LendingClub beats profit estimates. Pennsylvania fines SoFi subsidiary $110,000. Kabbage partners with GoDaddy. Zopa makes banking debut. RateSetter rolls out investor self-certification. Today’s main analysis: LendingClub Q3 earnings. International P2P lending volumes. Today’s thought-provoking articles: The hot stuff at Money 2020. China’s slowing economy. International […]

The post Thursday November 7 2019, Weekly News Digest appeared first on Lending Times.

Lending Club

News Comments

United States

United Kingdom

China

Other

News Summary

United States

Prosper Officially Launches HELOCs with First Bank Partner BBVA (Lend Academy), Rated: AAA

It was last November when we first heard that Prosper had plans to expand their offerings from personal loans into HELOCs.  In 2018 David Kimball noted that they would be partnering with banks on the new product and loans would be available both directly through Prosper.com and also as a white-labeled offering. Now we know their first bank partner is BBVA.

LendingClub beats profit estimates on higher fees, loans (Reuters), Rated: AAA

Online lending pioneer LendingClub Corp (LC.N) beat analysts’ estimates for third-quarter profit on Tuesday and forecast current-quarter largely above estimates, sending its shares up 4% in after-hours trading.

Transaction fees jumped 17% at the company, which helps connect customers looking for loans to individuals or institutional investors, such as banks, through its online marketplace.

Loan originations soared 16% to $3.35 billion in the third quarter, with total revenue rising 11% to $204.9 million.

LendingClub Q3 2019 Earnings Results Review (Lend Academy), Rated: AAA

Revenue also topped records at $204.9 million, up 11% year over year. Losses narrowed to a GAAP net loss of just $400,000 compared to the prior year period where they lost $22.8 million. Adjusted net income came in at $8 million, up from a loss of $7.3 million in the prior year period.

Source: Lending Club

Pennsylvania regulators hit SoFi with enforcement action (American Banker), Rated: AAA

A subsidiary of Social Finance Inc. has agreed to pay a $110,000 fine in Pennsylvania after operating as a mortgage servicer for nearly a year without the required state licensing.

SoFi Lending Corp. is one of several mortgage companies that has been hit recently with enforcement actions in Pennsylvania after a change in state law in December 2017.

The new law required mortgage servicers that were operating in Pennsylvania to be licensed. Companies had until June 30, 2018, to apply without being penalized for unlicensed activity.

SoFi vs. Prosper: Which Personal Loan Lender Is Right for You? (credible), Rated: A

SoFi and Prosper are two companies that offer personal loans with competitive interest rates and no prepayment penalties. However, there are some major differences between the companies that could affect your decision on which one to choose.

Money 2020 Highlights, Jobs Report, Markets Doubt Fed (PeerIQ), Rated: AAA

What’s Hot and What’s Not at Money 2020?

Attendance was at record levels. Here’s our view on the areas attracting the most attention at Money 2020:

  • Lending-as-a-Service: lenders that enable non-banks, banks and credit unions originate loans (e.g., loan origination software, digital experience, bank workflow software, etc.). Examples: Better, nCino, Happy Money (backed by CUNA Mutual), Alchemy, Splash Financial, Blend, Roostify
  • International Lending: Non-banks expanding access to credit, particularly in the LatAm markets. Examples: CrediJusto (Mexico SME), Addi (Colombia POS), Nova Credit
  • Underwriting infrastructure: Reducing OPEX or fraud risk thru automation. Examples: Ocrolus, Feedzai

The healthy Friday jobs report supports the ‘wait and see’ Fed view (although it is a backward looking indicator). The report indicated growth in employment of 128K in October and a tick-up in unemployment to 3.6%.

Source: WSJ, Labor Department, PeerIQ

Kabbage partners with GoDaddy to offer capital to entrepreneurs and SMBs (Tearsheet), Rated: AAA

The partnership: Kabbage’s online lending platform is now available to GoDaddy’s U.S. customers to access a business line of credit in minutes.

  • Customers can access flexible lines of credit of up to $250,000 in minutes after filling out a short application.
  • Existing GoDaddy customers can get $100 off their first month’s fees
  • “We know that a lack of capital for marketing and other core activities remains a major roadblock to accelerate growth. Our partnership with Kabbage is key in our ongoing mission to empower our customers and provide them with the resources they need to fuel their business needs,” said Melissa Schneider, GoDaddy’s vice president of global marketing operations.

Ron Suber Shares Perspective on Fintech (Crowdfund Insider), Rated: A

Ron Suber is one of the better-known names in the Fintech sector. Originally, Suber’s role as the President of the marketplace lending platform Prosper Marketplace brought Suber’s name to prominence as the Fintech emerged as an early leader in the US online lending market. Since departing Prosper’s management team several years ago, Suber has been associated with multiple Fintech’s as an investor, advisor or, perhaps, a board member. Today, Suber has invested in more than a dozen Fintech companies

Real estate crowdfunding startup CrowdStreet turns to its customers to raise $ 12M round (GeekWire), Rated: A

CrowdStreet, a Portland-based commercial real estate crowdfunding startup, has raised a big new funding round, with a twist. Instead of relying solely on venture capital investors, the startup turned to its own community of real estate investors and developers to raise the bulk of the money for its Series C round.

The result: CrowdStreet this morning announced it has raised $12 million, primarily from the users of its platform, bringing lifetime funding to $25 million.

CrowdStreet lands $ 12M in financing, hires execs (The Real Deal), Rated: B

Robert Stiles, former chief financial officer at LendingHome, joined as CFO/COO. Londa Quisling was named chief technology officer, after serving as chief product officer at Treehouse. And John Havens, previously of BNY Mellon, joined as vice president of capital markets.

Inside Affirm’s ID Verification And Fraud Prevention Techniques (PYMNTS), Rated: A

Many consumers do not have funds readily on hand to make big purchases like electronics or furniture and prefer turning to instant loan apps like Affirm, a point-of-sale installment lender established in 2013, rather than going into debt with a bank or credit card provider. Customers may feel thankful to be able to pay off a purchase over a year, but not at the cost of losing their identities to fraudsters or scammers.

Max Levchin backs digital banking startup built to reward savers (Finextra), Rated: A

A new digital banking platform promising to help reward people for positive financial behaviour has closed a $3.5 million seed round led by Accomplice Ventures and Walkabout Ventures nd joined by PayPal founder Max Levchin’s startup studio.

According to Moody Analytics, an average person under the age of 35 saves -1.8% of their income. HMBradley is promising to tackle this by increasing awareness and rewarding people for saving more.

LA is fast becoming a fintech hub as HMBradley launches another West Coast challenger bank (TechCrunch), Rated: B

Add HMBradley to the list of Los Angeles-based startups looking to shake up the world of high finance typically dominated by East Coast giants with names like JPMorgan Chase, Citigroup, Morgan Stanley and Goldman Sachs.

Building A Challenger Bank That Actually Challenges Traditional Banking (PYMNTS), Rated: A

Minus the CEOs at the top-10 largest banks in the U.S., whose main concern is probably figuring how to deal with their trillions of dollars’ worth of assets, nearly the entirety of bank CEOs outside that tier have one primary concern, according to Bruhnke: How do they grow deposits? Meanwhile, he noted, bank customers also have a singular desire: How do they make the most money on the funds they have deposited?

How Goldman Sachs plans to boost its reputation with online bank Marcus (Yahoo! Finance), Rated: A

Goldman Sachs’ upstart digital consumer bank, Marcus by Goldman Sachs, will help boost the reputation of its parent company, one of its leaders told Yahoo Finance recently.

The OCC Fintech Charter Is Down, but Maybe Not Out (Lexology), Rated: A

The Office of the Comptroller of the Currency (OCC) recently faced another setback in its attempt to issue a special purpose national bank charter tailored to fintech companies (fintech charter). A federal district court in New York held that the OCC does not have the authority to grant charters to companies that do not accept deposits. The ruling is a blow to the OCC’s efforts to provide new avenues for innovation in financial services. The fintech charter would allow fintech companies, which do not accept deposits like traditional banks, to benefit from the same preemption of state laws and licensing requirements as national banks.

Troubled Fintech Charter: How More Delays Impact Competitive Situation (The Financial Brand), Rated: A

The other is Varo, which initially considered going for an OCC special purpose charter but then decided to apply for a full-service charter. Varo has preliminary approval from OCC and awaits approval of its FDIC deposit insurance application. Below, we look at how Lending Club, the online marketplace consumer loan platform, is exploring chartering options.

Crypto APIs Launches Trading APIs, Allowing Users to Leverage Multiple Crypto Exchange Accounts (Cryptovest), Rated: A

The Trading APIs service provides one Unified API that has integrated multiple crypto exchanges. Thus, users will now be able to link multiple exchange accounts to their profile, collect data and execute their portfolio management trades from a single point.

Crypto APIs is used by thousands of developers to create products like Crypto exchanges, Crypto wallets, Trading bots, Crypto PSP, Arbitrage solutions, Crypto Lending solutions and many more.

Brex And Bank Of The West Team On Co-Branded Credit Card (Forbes), Rated: A

Brex, the fintech credit card startup, is teaming up with Bank of the West, the subsidiary of BNP Paribas, to roll out a co-branded credit card. It marks the first co-branded credit card to come out of Brex which caters to startups and entrepreneurs.

Washington flexes its muscles on small-business lending (American Banker), Rated: A

In one instance, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency angered borrower advocates by siding in court with a high-cost business lender. In the other, the Consumer Financial Protection Bureau signaled its intention to move forward with a small-business lending rule that has languished for nine years amid sharp disagreements over its proper scope.

USA Continues to be a Top Location for Fintech Events (Fintech News), Rated: A

On the global fintech scene, the US has been amongst the top leaders, accounting for 57% of the fintech market in 2018, according to a Mordor Intelligence research.

Fintech continues its momentum this year, with investment in US fintech companies surging to US$12.7 billion in the first half of 2019. That represents a 60% increase in value of deals and signals a trend of larger deals in already the world’s biggest and most active fintech market, according to data from Accenture.

Legitimate Shoppers Take Advantage of Deals, Outpacing Seasonal Growth in Fraudsters (Riskified Email), Rated: A

A new report from 

Elevate Credit to Attend the Stephens 2019 Investment Conference (BusinessWire), Rated: B

Elevate Credit, Inc. (NYSE: ELVT) today announced that its Interim Chief Executive Officer, Jason Harvison, and Chief Financial Officer, Chris Lutes, will attend the Stephens 2019 Nashville Investment Conference on November 14th at the Omni Nashville Hotel. Mr. Harvison and Mr. Lutes will be available for 1×1 meetings with investors.

Michigan AG sues online tribal lender (Lexology), Rated: B

On October 31, the Michigan attorney general announced it filed a lawsuit against an online lender alleging the lender violated the CFPA and Michigan…

United Kingdom

Peer-to-peer lender Zopa makes banking debut as pressure mounts (City A.M.), Rated: AAA

Zopa, one of the UK’s three largest names in peer-to-peer lending, is to launch its first foray into banking after receiving partial authorisation last year.

RateSetter begins roll-out of investor self-certification (P2P Finance News), Rated: AAA

RATESETTER has begun asking its customers to confirm their investor status ahead of the Financial Conduct Authority’s (FCA) new marketing and disclosure rules that come into effect on 9 December.

iwoca hits £1bn lending milestone as headcount soars (AltFi), Rated: A

UK business lender nearly doubled its lending last year to £330m, helping the startup announce it has now reached a cumulative lending milestone of over £1bn.

The news comes as iwoca’s headcount has jumped 50% in the last 12 months, boosted further by the £10m BCR grant which the company secured in August to further expand its customer base.

China

China has a steady hand on its slowing economy, but can it prevent a crash landing? (SCMP), Rated: AAA

Year-on-year growth has fallen by 0.2 percentage points per quarter this year, from 6.4 per cent in the first quarter to 6.2 per cent in the second quarter and to 6 per cent in the most recent quarter.

China to Transform Remaining P2P Platforms (Finews.Asia), Rated: A

Recent data showed that the number of online P2P platforms plummeted to just 427 – a 59 percent drop compared to 2018-end. The total outstanding loan value and the number of borrowers also dropped correspondingly by 49 percent and 55 percent, respectively.

China is making rapid inroads towards reducing peer-to-peer lending risk to meet the 2020 target deadline but expects to keep alive the few remaining with strong fintech expertise and shareholder support.

China warned to avoid P2P lending mistakes in blockchain push (Tech in Asia), Rated: A

China has been warned to avoid the same mistakes with blockchain that it made with its peer-to-peer lending, as the government vowed a “thorough revamping” of the controversial lending platforms as part of a continuing battle against financial risk amid the domestic economic slowdown and the trade war with the US.

Chinese fintech players want to do a Xiaomi in lending. Caution: regulatory glare ahead (India Times), Rated: A

From adopting unique business models to routing investments through Singapore, Chinese lenders are trying every trick in the book to win the Indian fintech-lending space. But getting money to India, deploying it, and dealing with stringent KYC norms is easier said than done.

Asset management arbitration cases in China (Vantage Asia), Rated: A

The wave of closures of P2P platforms in China in the summer of 2018 garnered national attention. The latest blacklist for P2P lending published by “P2PEYE.COM” ( shows that as of the end of March 2019, the number of problematic P2P platforms reached 5,388.

European Union

Marks & Spencer Buy Now, Pay Later Option (The National Law Review), Rated: AAA

Klarna, a popular BNPL provider used by over 4,000 UK retailers, offers three types of BNPL service:

  1. delayed payment up to 30 days after purchase. This incurs no interest or fees, providing the payment is made within the timeframe.
  2. instalment options whereby the purchaser can pay in three equal, interest-free payments every 30 days.
  3. flexible financing, which spreads the cost of larger purchases into manageable monthly payments. The term for this repayment option ranges from six to 36 months.

Upcoming maintenance affecting ability to view orders (Klarna), Rated: A

On Wednesday 6th November at 05:00 CEST, we will perform an important technical maintenance which will prevent customers from seeing some order details within the Klarna app for a short time. We expect this maintenance to take approximately 15 minutes, after which time full details of orders will become accessible again.

LendIt Fintech Europe 2019 Slide Presentations Now Live (LendIt), Rated: AAA

Below, you can find the presentations from keynote speakers at the event, as well as the different track presentations.

Lending Innovations

More presentations here.

International

Beijing may cull a stateside unicorn stampede (Reuters), Rated: AAA

Chinese firms have raised just $3 billion from American exchanges so far this year, less than a third of the 2018 total. In the last week of October, however, half a dozen companies filed for initial public offerings in New York, bringing the total backlog of Chinese floats to 24, according to data from Refinitiv. Rising trade uncertainties, tougher listing requirements on the NASDAQ and an upcoming U.S. presidential election have sparked fears that 2020 may prove even more volatile for debutants.

International P2P Lending Volumes October 2019 (P2P-Banking), Rated: AAA

Mintos leads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 703 million Euro.

Milestones in cumulative volume lent crossed this month:

Asia

P2P lending platform Validus expands into Vietnam (Business Times), Rated: AAA

SMEs make up 97 per cent of Vietnam’s enterprises, but only account for 22 per cent of total bank lending. To meet a US$21 billion SME financing gap in the country, Validus Vietnam will partner corporates to provide SME growth financing to their vendors and subcontractors.

How South Korea’s PeopleFund Is Shaking Up P2P Lending (Yahoo! Finance), Rated: A

Joey Kim, chief executive officer at PeopleFund, discusses what his company does, the growth drivers for his company, his latest funding round, P2P lending in South Korea, regulation, the possibility of consolidation in the industry and how the Korean economic headwinds are impacting his business. He speaks exclusively on “Bloomberg Daybreak: Asia.”

Vietnam’s IT Sector: 5 Industries to Watch (Vietnam Briefing), Rated: A

Vietnam’s fintech industry is expected to reach US$7.8 billion in revenue by 2020. A rising middle class, growing internet usage, and a young population present a great combination for the fintech sector to thrive. An estimated 120 companies and brands cover a wide range of services, from digital payments to wealth management and blockchain.

Fintech help banks broaden customer base (The Jakarta Post), Rated: A

Instead of competing against each other, banks and financial technology (fintech) companies are joining hands and combining their resources to tap into the country’s growing financial services market.In an effort to keep up-to-date with recent technology and stay relevant amid the latest changes in financial services, many banks have signed partnership deals or bought into nimble start-ups as an alternative to building costly technology projects.For the banks, the logic behind a partnership with fintech companies is simple: It gives them the opportunity to reach a wider customer base, unlock their technological capabilities without having to buy one of their own and penetrate the country’s unbanked population — all without having to spend too much money.“We are partnering with 12 fintech companies from peer-to-peer [P2P] lending and payment apps to SME [small, middle, enterprise]…

Latin America

Preview of LendIt Fintech’s inaugural LatAm conference (LendIt), Rated: AAA

Temenos’ report tags financial inclusion as LatAm bankers’ priority (IBS Intelligence), Rated: A

Temenos has concluded the LatAm results for its annual retail banking survey, conducted by the Economist Intelligence Unit (EIU). The survey titled ‘A whole new world: How technology is driving the evolution of intelligent banking in Latin America’ stated that 35% of retail bankers prioritize investments in digital technologies along with cost-cutting or margin improvement for furthering their financial inclusion goal.

Authors:

George Popescu
Allen Taylor

The post Thursday November 7 2019, Weekly News Digest appeared first on Lending Times.

Thursday October 24 2019, Weekly News Digest

P2P lending tax rates

News Comments Today’s main news: Judge says OCC cannot issue fintech charters. Kabbage ends Q3 with nearly $100M in revenue. Funding Circle shares up over 10% while loans under management up over 30%. Balboa competes $409M securitization. FundingSecure enters administration. Today’s main analysis: Q3 bank earnings. Today’s thought-provoking articles: 2019 financial fears infographic. Why there […]

The post Thursday October 24 2019, Weekly News Digest appeared first on Lending Times.

P2P lending tax rates

News Comments

United States

United Kingdom

China

Other

News Summary

United States

Fintech unicorn Kabbage ends Q3 with nearly 0 million in revenue amid loan growth (MarketWatch), Rated: AAA

Financial technology unicorn Kabbage finished the third quarter with just shy of $100 million in revenue as the company continued to grow its small-business lending platform.

The decade-old company told MarketWatch that it generated $99.4 million in third-quarter revenue as loan originations ticked up 43% on a year-over-year basis. The company said it extended $715 million in loans to customers during the quarter.

US fintech Kabbage launches new payment service to help small businesses get paid quicker (AltFi), Rated: B

Kabbage, a US fintech backed by Softbank which uses AI-based algorithms to help work out the terms of small business lending, is launching a payments service which it says will cut the time it takes small businesses to get paid from 90 days to 24 hours.

Judge Rules OCC Unable to Issue Fintech Charters (Lend Academy), Rated: AAA

Yesterday, a federal judge ruled that the OCC does not have the legal authority to issue bank charters to non-banks. Judge Victor Marrero ruled on the fact that a clause in the National Bank Act’s business of banking requires that only firms which take deposits can receive a national bank charter.

Banking charter remains a long way off for fintechs after court ruling (American Banker), Rated: A

Fintech firms continue to face a murky path into the banking system after a federal court ruling that threw out the Office of the Comptroller of the Currency’s special-purpose charter, observers said.

The charter has already been on unsteady ground. No firm has yet applied with the OCC facing legal challenges. But the decision Monday out of the U.S. District Court for the Southern District of New York shines an even brighter light on potential alternatives for fintech companies seeking a national licensing solution.

Is This the End for the OCC Fintech Charter? (Payments Journal), Rated: B

The story isn’t over yet. The OCC has said it will appeal the decision.

New Jersey bank partners with On Deck Capital (Biz Journals), Rated: A

Marketplace Lending Update #7: This and That (The National Law Review), Rated: A

In striking down the OCC’s interpretation of Section 5.20(e)(1), Judge Marrero reasoned that the National Bank Act “unambiguously requires that, absent a statutory provision to the contrary, only depository institutions are eligible to receive national bank charters from the OCC.”

Kabbage Heads to Court (Again)

Non-bank marketplace lender Kabbage joins the growing number of online lenders who are defending Madden and “true lender” claims in New York’s federal courts. Unlike prior lawsuits, such as those recently filed against Capital One and Chase Bank,2 the putative class action against Kabbage targets small business loans, not credit card or other consumer loans.

Q3 Bank Earnings, Venmo & AmEx Card Launch (PeerIQ), Rated: AAA

PayPal is launching a Venmo credit card (expected 2H 2020). Venmo’s credit card launch follows a flurry of launches from Avant, Upgrade, Ollo, Brex and others in recent years. PayPal has a unique edge – the breadth of customers on its payment network. Relatedly, PayPal and Synchrony extending their overall 15-year consumer credit relationship.

Bank Earnings Season Underway

JPM

  • Industry leading ROE of 18% driven by consumer banking ROE 30%+ [!!]
Source: PeerIQ, JPMorgan Chase & Co

Citi

  • Strongest 35% YTD share price gain in KBW index (stock trading below book value)
  • 66% of new deposits coming from areas where they do not have branches

GS

  • ROE in the 12% range, profit drops 26%. ROE will be low for the foreseeable future while GS pours billions in investing in building a consumer franchise
  • CEO David Solomon: “In three short years, we have raised $55 billion in deposits on the Marcus platform, generated $5 billion in loans, and built a new credit-card platform and launched Apple Card,” adding “which we believe is the most successful credit card launch ever.”

Bank of America

  • Profits up 8% YOY; NIM robust at 244 bps just shy of recent peak of 251 bps
  • #1 in mobile banking and online banking. Digital banking users have increased by 5% over the past year and number of active mobile users has increased by almost 11%. – Number of branches has decreased by 1.9

Balboa Completes Largest Securitization in Company History at $ 409MM (Monitor Daily), Rated: AAA

Online lender Balboa Capital successfully completed a $409 million asset-backed securitization (ABS) of small and mid-ticket equipment loans and leases, its sixth and largest transaction to date.

ABS Professionals Look to New Financial Partners Amidst Changing Economic Landscape, Capital One (ABL Advisor), Rated: A

Capital One survey conducted at ABS East 2019, a conference convening professionals from across the asset-backed securities (ABS) industry, found more than one-third (38 percent) of professionals plan to engage with new financial partners and implement new technologies, over the next 12 months, to prepare for the changing economic landscape. Additionally, 34 percent of respondents plan on reviewing or reshaping their credit and underwriting risks over the next 12 months.

Of the various challenges facing the industry, ABS professionals elected that regulatory uncertainty (22 percent), increased credit risk (18 percent) and increased competition (18 percent) pose the greatest challenges for their businesses over the next 12 months. Fluctuations in interest rates was listed as the greatest challenge for 15 percent of respondents.

2019 Financial Fears Survey (Wallet Hub), Rated: AAA

Current Mortgage Rates in Iowa (Benzinga), Rated: A

Quick Look: Best Mortgage Lenders in Iowa

  1. Academy Mortgage Corporation: Best Overall
  2. Quicken Loans: Best for Online Lending
  3. Wells Fargo: Best for First-time Home Buyers
  4. Bank Iowa: Best for Customer Service
  5. US Bank: Best for Competetive Rates

1. Best Overall: Academy Mortgage Corporation

You can get in-person service and online loan assistance for conventional, FHA, VA and refinance loans, as well as first-time homebuyer education.

IIRR Management Services Discusses RealtyShares Acquisition (Crowdfund Insider), Rated: A

IIRR Management Services (IRM) claims to be one of the largest crowdfunded real estate investment firms in the world. IRM is owned by RREAF Holdings and iintoo Investments. The company recently took over management of Realtyshares’​ portfolio – once a prominent entrant in the real estate crowdfunding sector that unexpectedly collapsed in 2018 stunning the industry. Today, IRM claims over $1.5 billion in combined assets salvaged from RealtyShares.

CrowdStreet: A Platform that Democratizes Real Estate Investment Opportunities While Diversifying Portfolios (CardRates), Rated: A

CrowdStreet indicates a total average annual return rate of 25.5% across all fully realized deals, according to the company website. The company believes markets are stronger when they are more accessible, transparent, and efficient.

Since CrowdStreet launched in 2014, the company has posted over 360 projects on its Marketplace and has raised more than $800 million from thousands of investors, he said.

The platform allows accredited investors to diversify their portfolios by investing in individual projects or funds for as little as $25,000.

Finitive Receives $ 2M in Venture Debt from Silicon Valley Bank (FINSMES), Rated: A

Finitive, a NYC-based financial technology platform providing institutional investors with direct access to alternative lending investments, closed a $2m venture debt.

Bitcoin IRA to Launch Interest-Earning Crypto Accounts (Altcoin Buzz), Rated: A

Bitcoin IRA has partnered with the leading crypto trading and lending firm Genesis Capital to launch interest-earning cryptocurrency accounts.

The crypto trading firm will accept Bitcoin (BTC), Ether (ETH), Litecoin (LTC), and ZCASH.

Crypto-powered foundation Rippleworks expands its reach (Devex), Rated: A

Galen and Larsen, who built the online lender E-Loan together, are both interested in broadening the perspectives of Silicon Valley executives who might otherwise be detached from ways to make an impact on the rest of the world.

Fintech Innovator Fundbox Named to Prestigious IDC FinTech Rankings by IDC Financial Insights (Yahoo! Finance), Rated: B

Fundbox, the B2B payments and credit network designed to facilitate and accelerate B2B commerce at scale, announced that the company ranked #92 on the 2019 IDC FinTech Rankings.

Beware Online Loan Calculators (WSJ), Rated: B

According to a study published online in the Journal of Behavioral and Experimental Finance in June, borrowers unconsciously could be manipulated into choosing a more expensive loan, depending on the calculator’s default settings.

United Kingdom

Shares in Funding Circle up over 10 per cent, after loans under management jump by more than 30 per cent (AltFi), Rated: AAA

Shares in peer-to-peer lender Funding Circle climbed over 10 percent after its loans under management soared 31 percent to £3.7bn, but the company cautioned of “an uncertain economic environment”.

It said loans under management had grown to £3.7bn compared to £2.8bn the year previous.

Funding Circle reported that loan originations were up from £1.6bn in 2018 to £1.8bn in 2019.

FundingSecure goes into administration (P2P Finance News), Rated: AAA

FUNDINGSECURE, the peer-to-peer pawnbroker and property lender, has gone into administration.

FundingSecure administration not a ‘reflection of P2P as a whole’, claims major platform (Bridging and Commercial), Rated: A

Jonathan Avery-Gee, Edward Avery-Gee and Daniel Richardson at CG & Co have been appointed administrators of the company and are working closely with the FCA.

Stuart Law, CEO at Assetz Capital, claimed that smaller P2P lenders were “clearly struggling to keep up”.

Assetz chief rules out purchase of FundingSecure loanbook

Industry raises concerns as Funding Secure enters administration (Mortgage Introducer), Rated: A

The collapse of the P2P firm has left around 3,500 investors facing an unclear future as the administrator works their way through the loans.

Starling Bank Raises £30 Million to Fund its Expansion as it Approaches its Millionth Account (The Fintech Times), Rated: A

Starling Bank, the UK digital bank, has raised £30 million in a new funding round. Merian Chrysalis Investment Company Limited is leading the round with an investment of £20 million, while Starling’s existing investor, JTC, has added a further £10 million.

Andrew Lawson joins Oodle Car Finance as chief product officer (Asset Finance International), Rated: A

Oodle Car Finance has appointed Andrew Lawson as chief product officer.

He joins from Zopa, the world’s first peer-to-peer lender, where he spent five years as chief product officer responsible for business growth during a period of expansion that saw the brand become the UK’s largest online open market lender.

Celsius Network Now Supports Tether At 12% Interest (CryptoBriefing), Rated: A

Celsius Network will begin supporting Tether (USDT), the largest stablecoin in the market, in its interest-earning wallet. That will enable users to leverage their holdings in order to receive a passive income.

Wayfair, Klarna bring flexible payments to UK shoppers (The Paypers), Rated: A

Klarna’s range of flexible payments are available to shoppers online at Wayfair.co.uk, with additional new features on Wayfair.de. Joining Klarna’s partner list, Wayfair customers across the UK now have control over how and when they pay for their purchases, with payments options such as Pay later and Pay in 3.

Six bids made for stricken reseller (Channel Web), Rated: B

Six offers have been made for welsh education reseller Gaia, which fell into administration earlier this year.

A number of lenders were also revealed to be owed hundreds of thousands of pounds, with White Oak UK and Funding Circle owed £703,000 and £500,000 respectively. HMRC is owed £866,148.

Capitalise.com launches partnership with iwoca and a high street bank to enable instant funding quotes for SMEs (Fintech Finance), Rated: B

Capitalise.com, the business funding platform for accountants, has today announced a partnership with small business lender, iwoca, and a high street bank, to launch Instant Offers. The partnership enables accountants to receive instant quotes on funding applications for their clients. Accountants benefit from offering their clients exceptional customer service with instant quotations and eligibility on suitable financial products whilst lenders can onboard high credit quality businesses, faster.

China

The Meteoric Rise and Spectacular Fall of Peer to Peer Lending in China (Lend Academy), Rated: AAA

I first wrote about the Chinese p2p lending industry later that year and introduced the west to CreditEase, the company that was the largest p2p lending platform in the world. Over the next couple of years the industry thrived with thousands of platforms launching and the total loan volume skyrocketing to over $150 billion in 2015, which was four times the loan volume of 2014.

China’s Biggest Ever Financial Scandal

We got the first inkling that something was not quite right when China was rocked by the biggest financial scandal in its history. Ezubao, one of China’s largest p2p lending platforms, collapsed as it was revealed the business was nothing more than an elaborate Ponzi scheme. Around 900,000 investors collectively lost $7.6 billion in what was the second largest Ponzi scheme the world had ever seen (Madoff being the largest).

There Will Be No LendIt China in 2019

We have held LendIt China every year since 2016 in Shanghai and I am sad to report that in 2019 there will be no event. While we have expanded beyond online lending it still represented a significant part of our business in 2018 but given the recent challenges we expect no lending companies will be interested in speaking, sponsoring or even attending this year. So, we made the difficult decision to cancel the event. We will regroup in 2020 and hopefully will be able to bring our unique event back to China.

Chinese Regulators Forcing More P2P Platform Closures With Stricter Rules (Business Times), Rated: A

The newly imposed rules by the China Banking and Insurance Regulatory Commission (CBIRC) will mainly be targeting online P2P lending companies. These companies often entail high-risk lending activities that result in massive defaults, suicide, deaths, and illegal debt collections.

Since 2017, the country has had an estimated $692.8 billion in bad loans. The sector has tried to dispose of these bad loans as best they can through different methods.

China’s Incredible Shrinking P2P Lending Industry (Caixin Global), Rated: A

The draconian cleanup campaign of China’s scandal-ridden peer-to-peer (P2P) industry has led to a three-year implosion that has put the sector almost back to where it was in 2014.

The number of functioning P2P lending platforms fell to 646 in September, a decline of nine compared with August and the lowest since early 2014 when the industry was booming, data compiled by Wangdaizhijia, an online lending research portal, show. The scale of the drop has been dramatic — at its peak in November 2015, the sector had more than 3,600 platforms.

European Union

Digital lending platform Roostify plots expansion with new investment from Santander (Housingwire), Rated: AAA

Roostify, which powers the digital mortgage platforms of JPMorgan ChaseTD BankGuild MortgageHSBC Bank USA and more, is plotting an expansion in the U.S. and internationally thanks to a new injection of funding from Santander Group and others.

International

Tax Rates on P2P Lending – Low versus High (P2P-Banking), Rated: AAA

In the countries colored in black the income tax rate is applied on interest earned on p2p lending investments. That means the individual rate of taxation depends on the other and overall income of the investor. For example in the UK the tax bands are 20%, 40% and 45% dependent on overall income. In Ireland tax bands are 20% and 40%.

Source: P2P-Banking

Banks That Can’t Keep Pace With Fintech Firms Risk $ 88 Billion Revenue Loss (Forbes), Rated: AAA

Days after it was announced that banks across the world are currently in a ‘do-or-die dilemma,’ Accenture’s 2019 Global Payments Survey reveals that 60 percent of the participants believe they will lose up to 15 percent of payments revenue – $88 billion – in the next three years after being displaced by emerging, competing financial services players.

38 percent of respondents said that big technology companies pose a competitive threat and 32 percent of those surveyed feel the same about fintech firms, which makes sense with the latter attracting nearly $11 billion through over 800 deals between 2016 and 2018.

Asia

Fintech companies need strict law to protect consumers, ensure fair business (The Jakarta Post), Rated: AAA

Indonesia’s growing financial technology (fintech) companies have called on the government and legislators to issue a new law to ensure fair business for and better protection of both the industry and consumers. The Indonesian Fintech Lenders Association (AFPI) said that fintech companies, especially those involved in peer-to-peer (P2P) lending or online lending, needed a stricter regulation to ensure that all the stakeholders, such as borrowers and investors, would receive better protection.

The Explosion of FinTech in Indonesia and how Companies like Gojek and Weyland Tech, Inc. are Winning (Investor Ideas), Rated: A

According to one recent report, “Indonesia’s fintech industry is in the midst of a period of significant growth. P2P lending recorded a triple-digit increase in 2018, while e-payment services have grown more than six-fold since 2012, prompting a surge of new foreign investment into a vibrant and increasingly diverse start-up community.”

Canada

Luge Capital raises $ 85M to invest in Canadian fintech startups (TechCrunch), Rated: AAA

There are 831 financial technology startups headquartered in or operating in Canada, according to data collected by Fintech Growth Syndicate, yet only a handful of venture capital funds specializing in the region and sector.

Luge Capital, a fintech and AI-focused venture capital fund headquartered in Montreal and Toronto, is looking to close that gap. The firm has raised $85 million for its debut fund and plans to make seed investments as small as $150,000 and as large as $2 million.

Authors:

George Popescu
Allen Taylor

The post Thursday October 24 2019, Weekly News Digest appeared first on Lending Times.

Thursday September 26 2019, Weekly News Digest

LendingClub eligibility

News Comments Today’s main news: SoFi intros crypto trading. Investors locked out of LendingClub in 4 states. Funding Circle asks US regulators to folow UK’s model. Fundbox raises $176M. Klarna surpasses 12M transactions per year. Today’s main analysis: U.S. subprime auto loan ABS recession scenarios (A MUST-READ). Today’s thought-provoking articles: Recession talk cooling. Consumers with […]

The post Thursday September 26 2019, Weekly News Digest appeared first on Lending Times.

LendingClub eligibility

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

SoFi Introduces Crypto Trading With SoFi Invest (PR Newswire), Rated: AAA

SoFi announced today that it has added crypto trading to its fast-growing SoFi Invest platform, as a response to demand from its over 800,000 members. SoFi Invest is now the first platform to offer automated and active investing with stocks, ETFs, and crypto through a single app.

SoFi Adds Bitcoin, Litecoin, and Ethereum to Invest Platform (Cheddar), Rated: A

SoFi goes live with crypto trading service for its over 800K users (The Block), Rated: B

SoFi users can initially buy and sell three cryptocurrencies – bitcoin (BTC), ether (ETH) and litecoin (LTC). The Block first reported the story last week, saying that the firm is beta testing the service in partnership with Coinbase.

SoFi CEO on what’s next for the company (Yahoo! Finance), Rated: A

Sofi CEO Anthony Noto joins The First Trade to discuss what’s next for the company.

Watch the video here.

Charlie Lee {LTC} praises SoFi as crypto-investing with Litecoin kicks-off (Our Bitcoin News), Rated: A

Litecoin is ranked at #6 underneath Tether, as well as Bitcoin Cash, in the market. The price jumped up at a rate of 0.60% in the course of the past 24-hours. This led to LTC scaling all the way up to $57.03 where it presently rests. The trading volume recorded stands at roughly $2.957 billion, whereas the supply has 63,337,479 LTC coins included as part of circulation. The total market cap of Litecoin amounts to $3.612 billion which depicts a massive decline compared to the value attained a week back.

SoFi CEO: Start investing in your 20s (Yahoo! Finance), Rated: A

SoFi CEO Anthony Noto discusses how his company’s consumers can now buy and sell Bitcoin, Ethereum and Litecoin.

SoFi Refunds Investors Hit By Capital Gains from Proprietary ETFs (ETF Trends), Rated: A

Financial technology company SoFi is offering refunds to investors hit by capital gains taxes following the change of replacing Vanguard funds with their proprietary ETFs in certain portfolios managed by their robo-adviser.

Some Investors Locked Out of Investing in LendingClub Loans (Lend Academy), Rated: AAA

Over the last 24 hours we’ve received several messages from Lend Academy readers alerting us that they have received information that they are no longer able to invest in LendingClub notes. There is is also an active discussion on the Lend Academy forum.

LendingClub state eligibility as of 9/24/2019. Source: Lend Academy

Funding Circle urges US regulators to follow UK model (P2p Financ News), Rated: AAA

FUNDING Circle’s US division is urging the Securities and Exchange Commission (SEC) to amend its restrictions on peer-to-peer retail investment.

The US financial regulator limits annual investment to five per cent of an investor’s annual income if their yearly income or net worth is under $107,000 (£86,075), rising to 10 per cent if the investor earns more than that.

Two Franchise Trends Aspiring Franchisees Should Look Out For (Forbes), Rated: A

Over the past 14 years, I’ve coached more than 1,500 people who were searching for the best franchise for their situation. I recently read the 2019 Small Business Trends 

Fintech Fundbox raises $ 176M to lend to business using AI (Information Management), Rated: AAA

Fintech Fundbox Inc. has raised $176 million in a new funding round from investors including Allianz SE and General Catalyst. The company planned to announce the funding along with a new $150 million credit facility.

A Fundbox spokesman said the new round valued the company at between $500 million and $1 billion, but would not disclose the exact valuation.

U.S. Subprime Auto Loan ABS: Evaluating Recession Scenarios (DBRS), Rated: AAA

Summary Highlights

  • Under the hypothetical Recession Scenarios, DBRS found that credit enhancement (excluding excess spread) coverage of remaining expected losses, as determined by a multiple calculation, decreased at the inception of the hypothetical recession for all of the Sample Transactions. The senior debt tranches experienced a swift deleveraging whereas some of the subordinated debt tranches could be at risk for a potential downgrade during the hypothetical Recession Scenarios.
  • After the initial decline in the multiple calculations at inception of the hypothetical Recession Scenarios, the deleveraging nature of the sequential pay structures of the transactions resulted in the calculated multiples for the analyzed debt tranches to move into the multiple range corresponding to the original rating of the debt tranche over varying lengths of time. The multiples for some of the debt tranches originally rated BB were weaker and moved into the BB range at a slower pace. As a result, those tranches would be more likely to be considered for a potential downgrade as compared to the more senior debt tranches where the structures delevered more quickly and the multiples reached the range corresponding to the original rating over a generally shorter period.
  • Over the life of the Sample Transactions, the credit enhancement multiples for all of the debt tranches analyzed, some on a delayed basis, ultimately moved into the AAA rating multiple range.
  • In each of the Recession Scenarios, the structure of each of the transactions provided sufficient credit enhancement for timely payment of interest and ultimate payment of principal of all debt tranches.
Source: DBRS

Read the full report here.

A Cooling in Recession Talk, Heat Up in Housing (PeerIQ), Rated: AAA

Lower rates, improved credit scores, and tighter housing inventory are improving the outlook for housing. Housing market achieved an 18-month high in housing starts and a record high in FICO scores.

The Citigroup Economic Surprise Index – a measure of actuals vs economist’s expectations – has also registered readings above the neutral baseline suggesting slowdown fears may be exaggerated.

Source: PeerIQ, CitiGroup

Consumers with Significant Liquidity Needs Often Access Alternative and Traditional Credit Markets Concurrently (GlobeNewswire), Rated: AAA

Many lenders believe that consumers who turn to the alternative credit market for liquidity do so because they have no other options. However, a TransUnion study presented today at the Lend360 conference found that these borrowers are frequently applying for and receiving traditional credit at the same time. While traditional subprime installment lenders and alternative lenders are competing over the same consumers, the study finds that the liquidity need is often not fully met in either market.

Source: TransUnion

Risk Levels Higher for Traditional and Alternative Loan Borrowers

Controlling for risk score, 8.5% of the alternative credit-active consumers had a serious delinquency in the first 12 months, vs. just over 2% for the control group. Bankcard performance was also worse. While these borrowers exhibited a preference for unsecured personal loans under $1,500 within 12 months of the alternative credit origination, they also originated auto and bankcard credit during that time.

Read the full report here.

Lendio to Double Sales Force, Expand Loan Product Offerings (Benzinga), Rated: A

Lendio today announced plans to double the sales force at its Lehi, Utah, and Woodbury, New York, offices. The company has hired 80 employees in 2019, and intends to add another 40 sales representatives by the end of the year, with plans to bring on another 40 in the first quarter of 2020. In addition to the expanding workforce, Lendio plans to bolster its selection of loan products for small businesses, with a 10% increase in the number of product offerings in the coming year.

Fintech lenders taking more market share from banks, survey finds (American Banker), Rated: A

Fintechs are continuing to siphon away customers for unsecured personal loans from traditional lenders, according to a study released Wednesday by Experian.

The study found that digital lenders more than doubled their market share in the past four years, with consumers across the credit spectrum increasingly turning to fintechs like Lending Club and Social Finance.

Fintechs now provide 49.4% of unsecured personal loans as of March compared to 22.4% in 2015, according to Experian.

Fintech Lenders Could Hold the Keys to Recession Recovery (Salon), Rated: A

Born out of the last recession, young fintech lenders have not yet been tested by a significant economic storm, and many in the industry are wrapped up in a dialogue of speculation about the industry’s ability to ride out an impending recession. It’s time to turn the conversation instead to focus on how fintech lenders can position themselves to play a critical role in recovery from the next downturn, whenever it may happen.

WeWork should ask SoFi CEO for advice on how to save the company (Yahoo! Finance), Rated: A

The two new guys running the slowly sinking ship known as once hot tech startup WeWork should give SoFi CEO Anthony Noto a holla on his Apple iPhone. Trust me, Noto has some good, timely advice for Artie Minson and Sebastian Gunningham.

Because the former Goldman Sachs banker and Twitter chief financial officer, now SoFi chief clearly gets how to rebuild a promising tech startup after a high-profile challenge or two. And then possibly, take it down the path of a successful initial public offering.

Generation Z’ers want more financial education – and innovative tools to help them learn (PR Newswire), Rated: A

As high school students return to school, they may see the benefits of new state laws across the country that require curriculums to offer a class about personal finance. This is great news for young adults as 76% of recent high school graduates agree it should be required, according to a national survey by Experian.

Many Gen Z’ers surveyed say innovative tools are the way to go when it comes to learning about credit (45%) and almost half (48%) would prefer to use tech-driven tools versus textbooks to learn more.

Survey respondents also say they are currently learning about finances mostly through their friends (28%), YouTube (27%) and some form of social media (24%).

D.C. Court Dismisses Challenge to OCC’s Fintech Charter (Manatt), Rated: A

In the latest battle over the Office of the Comptroller of the Currency’s (OCC’s) plan to issue special purpose national bank (SPNB) charters, a D.C. federal judge has for a second time dismissed a lawsuit brought by the Conference of State Bank Supervisors (CSBS).

The decision creates the potential for circuit split, as a New York federal court reached the opposite conclusion in a nearly identical action filed by the state’s Department of Financial Services (DFS).

9 Ways To Build an Empire Without Lifting a Finger (Yahoo! Finance), Rated: A

Another way to build your real estate empire is through real estate crowdfunding. As with investing in a REIT, real estate crowdfunding allows you to pool your money with other investors to invest in real estate. This could include multifamily units, commercial properties and bundles of single-family homes.

According to U.S. News & World Report, the top real estate crowdfunding platforms are ArborCrowd, RealCrowd, Groundfloor, CrowdStreet, PeerStreet, Small Change and RealtyMogul.

If you can afford the minimum investment — which is usually $25,000 — you can make big returns. Groundfloor boasts 10% returns for individual investors and CrowdStreet’s is even higher with 25.5% total average annual returns across all fully realized deals.

RealCrowd offers a breakdown of average annual income on a $1 million investment based on the property type: $78,000 for a suburban office, $72,000 for a retail space, $59,000 for a downtown office and $58,000 for a multifamily unit.

The Best And Worst MA Towns For Young Families (Patch), Rated: A

The online mortgage broker Lending Tree has tried to take some of the guess work out of that decision by ranking every community in Massachusetts with 5,000 or more residents based on their appeal to families with school-age children.

Hingham, under Lending Tree’s methodology, received a score of 72.5. Last-place Webster’s score was 31.9. Other towns in the top 10 included Winchester, Needham, Milton, Longmeadow, Wellesley, Cochituate, Pinehurst, Lexington and Nantucket.

JPMorgan donates $ 25M to get fintech in hands of underbanked (American Banker), Rated: A

JPMorgan Chase announced Tuesday a $25 million commitment to the Financial Health Network’s Financial Solutions Lab, a program meant to focus on the creation of fintech tools to help consumers better manage their finances.

The Financial Health Network (formerly The Center for Financial Services Innovation) previously received a $30 million philanthropic donation from the bank that spanned the last five years.

Bitcoin and Ethereum dive deep, is Bakkt to blame? (Mashable), Rated: A

“The disappointing BAKKT opening signals to the crypto community that institutions are less ready to invest in BTC at scale than was supposed, which means the price was probably too high and due for a correction. What we’ve just seen is short sellers and momentum traders piling on to make things worse, and now here we are back at support,” Alex Mashinsky, CEO at crypto lending and depository company Celsius Network, told Mashable in an emailed statement.

STRATA Trust Company Reaches $ 2 Billion AUC Milestone (PR Newswire), Rated: A

STRATA Trust Company (“STRATA”), a custodian dedicated to the complexity of holding alternative investments in tax-advantaged, self-directed retirement accounts, announced today that the firm has surpassed $2 billion in assets under custody. STRATA offers access to a range of asset classes that include private equity, private debt, real estate, crowdfunding, structured settlements and more. Since 2008, STRATA has been committed to empowering investors and the investment community with wider diversification and alternative asset custody solutions in retirement portfolios by delivering industry-leading service, education and support.

Online Pawn Lending Goes Back Offline (Business Wire), Rated: A

Prominent online lender Borro Private Finance unexpectedly ceased its collateral-based lending program this summer after nearly ten years of business. The UK-US-based establishment specialized in online pawn loans against valuable assets, including fine art, jewelry, and watches. Borro’s discontinuation of its operations comes nearly two years after the company’s withdrawal from the bridge loan market in July 2017.

Eleventh Circuit Tosses Online Lender’s Forum Selection, Class Waiver Clauses (Lexology), Rated: A

Siding with six consumers who filed suit asserting violations of state usury laws against online lenders, the U.S. Court of Appeals for the Eleventh…

Marqeta Hires Vidya Peters As First Chief Marketing Officer, as Company Continues to Build Out Expansive Global Vision (Business Wire), Rated: B

Marqeta, the first global modern card issuing platform, today announced the addition of Chief Marketing Officer Vidya Peters to its executive team.

White Oak Commercial Finance Acquires Veritas Financial Partners’ Asset-Based Loan Portfolio (ABL Advisor), Rated: A

White Oak Commercial Finance (“White Oak”), an affiliate of White Oak Global Advisors, announced today it has purchased a portfolio of asset-based loans from Veritas Financial Partners, a Boca Raton, FL based specialty finance company.

Alchemy Technology And Equifax Partner To Drive FinTech Innovation (PR Newswire), Rated: B

Alchemy Technology Inc. and  Equifax Inc. (NYSE: EFX) today announced a new partnership to drive FinTech innovation. The relationship is designed to help banks, specialty financing firms and FinTech startups accelerate their time to market with easily deployable white labeled lending solutions. The two companies will make the “tech” in FinTech available to organizations of all sizes with a powerful combination of the Alchemy Lending Operating System and Equifax data analytics, credit, identity and income verification solutions.

Ex-Goldman Sachs Managing Director Joins Lendingblock as Strategic Advisor (Lendingblock), Rated: B

Lendingblock, the regulated, open exchange for institutional borrowing and lending of digital assets, today announces the appointment of John Macpherson as a strategic advisor.

CoreLogic Credco Integrates its Three-Bureau PreQual Solution with eLEND Solutions (CoreLogic), Rated: B

CoreLogic, a global provider of property information, insight, analytics and data-enabled solutions, today announced that CoreLogic Credco integrated its Three-Bureau PreQual credit report and score solution on eLEND Solutions, an automotive technology company specializing in online and in-store credit and finance solutions. The integration of the prequalification solution gives CoreLogic Credco customers who use eLEND instant, single-source access to a consumer’s credit report and FICO score from all three national credit bureaus – Experian, TransUnion or Equifax.

Tavant Named to 2019 IDC FinTech Rankings (Business Wire), Rated: B

Tavant, a Silicon Valley-based provider of AI-powered digital lending technologies, announced today it has been named to the 2019 IDC FinTech Rankings, the most comprehensive vendor ranking within the financial services industry.

United Kingdom

Klarna Surpasses 12M Transactions This Year (PYMNTS), Rated: AAA

FinTech payments disruptor Klarna has announced the start of its “No drama, just Klarna” retail campaign in partnership with 13 brands in the U.K., the company said in a press release on Wednesday (Sept. 25).

Klarna offers “pay later” payment options and attracts 50,000 new users each week. The startup said that in the past year, it has processed 12 million transactions. In August, more than 100,000 U.K. shoppers downloaded the Klarna app.

Klarna reports surge in payments, merchant growth during first half of 2019 (Mobile Payments Today), Rated: A

Klarna, a London based installment financing provider and challenger bank, said it surpassed 3 million active users in the U.K. and 170,000 retail merchants worldwide.

Brits hit financial maturity at 31 (P2P Finance News), Rated: A

THE age at which UK men and women finally feel secure in their finances is 31, according to Zopa.

The survey showed a clear split between age groups, with 21 to 25 year-olds believing 32 would be the age when they finally felt good about their finances, while those age 26 to 30 were less optimistic about the future, saying they would reach money maturity at 38.

OakNorth Bank completes £20m loan to specialist lending fund (London Loves Property), Rated: A

OakNorth Bank, the UK bank powered by OakNorth, has provided a £20m loan to the RAW Mortgage Fund, a specialist fund providing buy-to-let property loans against residential real estate in the UK.

Wonga borrowers have less than a week to submit payday loan reclaims (The Sun), Rated: A

Anyone who believes they have been mis-sold a Wonga loan is allowed to apply for compensation, but its administrators set a deadline of 11.59pm on September 30.

If you miss the deadline, you won’t be able to apply anymore and you won’t get any compensation for mis-selling.

Nexo Now Accepts Tokenized Gold for Instant Credit Lines and Will Offer Interest-Bearing Accounts on Gold (Covington Journal), Rated: A

Nexo is adding the NYDFS-regulated PAX Gold as a collateral option for its signature , bringing gold-backed lending to the blockchain.

With PAX Gold, now offers gold investors instant access to their gold wealth in over 45 fiat currencies via same/next day transfers and across 200+ jurisdictions.

European Union

Kreditech Eyes Expansion After Securing EUR 20 Million in Equity Financing (Yahoo! Finance), Rated: AAA

Kreditech is ready to scale globally in the near-prime customer segment – declares David Chan, Kreditech CEO. The Germany-based online direct lender and Point-of-Sale (POS) financing provider estimates its global target market at ca. EUR 300 bn in consumer credit issuance. It aims to reach EUR 1 bn in revenue by 2025, which will be driven by growth in existing markets where Kreditech is present, as well as expansion into new geographies. Kreditech currently operates in IndiaPolandRussia and Spain, and serves over one million customers. The company has raised EUR 20 million in its latest equity financing round.

You’ve heard of challenger banks, now meet the challenger lenders (sifted), Rated: AAA

For better or worse, it was Wonga that first put “challenger lenders” on the map. The UK payday lender’s meteoric rise saw it become a household name before its collapse last year after a string of irresponsible, inflated loans.

This month alone, large funding rounds were announced by Sweden’s Capcito and Lendify, as well as by UK’s Sonovate, an invoice lender for SMEs with over 750 active clients. Banks are also watching closely, with Goldman Sach’s equity arm being a notable funder in Lendable, recently ranked the UK’s sixth fastest-growing private tech company.

In the UK, the challenger-lender industry grew to £6.1 billion in 2017, according to a study by the Cambridge Centre for Alternative Finance (CCAF). The CCAF also estimated that 29% of all new loans issued to SMEs came from challenger lenders in 2017. PwC predicts that figure will rise to nearly 40% in the next decade.

Source: Financial Times
International

Marketplace Lenders Navigate The Choppy Waters Of Compliance (PYMNTS), Rated: AAA

Regulators the world over are beginning to take a closer look at the alternative and marketplace lending business model.

In June, the U.K.’s Financial Conduct Authority announced plans to impose stricter restrictions on marketplace and peer-to-peer (P2P) lenders beginning this December following the watchdog’s decision to place P2P lending platform Lendy into administration — a result, the FCA said, of the industry’s lenient requirements to disclose governance arrangements and controls.

Also, in China, analysts at Yingcan Group pointed to the government’s P2P and marketplace lending crackdown as being likely to shrink the industry by as much as 70 percent this year.

This Fintech Safari Could Be a Wild Ride (The Washington Post), Rated: AAA

From ATMs to credit cards and PayPal, the West’s dominance of innovation in consumer finance appears to have exhausted itself.

At the top of the emergent new order is the fintech duo from China — Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Next in line are Alphabet Inc. and Walmart Inc., whose highly localized smartphone payment rivalry is playing out between Google Pay and PhonePe in India. In Southeast Asia, two homegrown ride-hailing giants are aspiring to dominate commerce.

The rise of African mobile money is associated with M-Pesa, Kenya’s digital-wallet revolution. Now traditional lenders like Standard Chartered Plc, with a presence on the continent going back more than a century, are discovering that online banking can help them mobilize low-cost current and savings accounts more profitably than acquiring customers via physical branches.

Australia/New Zealand

Harmoney says the P2P lender has been ‘slowly moving to lending our own money’ since 2015 (interest), Rated: AAA

The founder of Harmoney, New Zealand’s biggest licensed peer-to-peer (P2P) lender, says he can’t see a viable P2P lending model in New Zealand which is why Harmoney has started lending its own money.

Neil Roberts and David Stevens of Harmoney (Lend Academy), Rated: A

Harmoney, the first peer to peer lender to be licensed in New Zealand, has originated more than NZ$1 billion in loans since launching five years ago.


Read the PDF transcript here.

India

Kreditech targets India after EUR20m funding boost (Finextra), Rated: AAA

Kreditech, a German-based online lender and POS financing provider focused on “near prime” borrowers, is looking to the Indian market after raising EUR20 million in funding.

The round was co-led by Runa Capital and unnamed German private investors, with participation from existing shareholders HPE Growth and Amadeus Capital Partners.
Southeast Asia

Accumulated P2P lending exceeds W6tr (The Investor), Rated: AAA

Accumulated peer-to-peer loans in South Korea have surpassed 6 trillion won ($5 billion), data showed on Sept. 26.

Outstanding P2P loans extended by 220 companies stood at 6.2 trillion won in June, compared with 4.7 trillion won at the end of last year, according to the data compiled by the Financial Supervisory Service.

Indonesia’s Investree in talks to raise series C funding for regional expansion (Tech in Asia), Rated: A

Indonesia’s fintech peer-to-peer lending startup PT Investree Radhika Jaya is in talks with several investors to raise a series C funding as the firm looks to boost its expansion in Southeast Asia.

The Securities Commission Malaysia Approves EdgeProp as First Property Crowdfunding Platform in Malaysia (Crowdfund Insider), Rated: A

The Securities Commission Malaysia (SC) has registered EdgeProp Sdn Bhd as the first “Recognised Market Operator” to establish and operate a property crowdfunding platform in Malaysia. EdgeProp was granted an approval in principle in September 2019.

FINTECH COMPANIES FACE TALENT SHORTAGE (StaffingIndustry.com), Rated: A

The majority, or 94%, of fintech companies in Singapore, say the country requires fintech talent, according to survey data from Michael Page Singapore.

The number of Singapore consumers adopting fintech products and services has drastically risen in the last two years, tripling from 23% in 2017 to 67% in 2019, according to Michael Page.

Bitcoin Daily (PYMNTS), Rated: B

And Singapore-based exchange Bitrue has announced the launch of a low-interest crypto lending platform, which goes live on September 30.

MENA

Qatar Boosts FinTech Focus (PYMNTS), Rated: A

As reported by Crowdfund Insider, the Qatar Financial Centre (QFC) has expanded the number FinTech-related activities that will be awarded licenses. The additional support will come from the QFC platform.

The seven firms include DecisionLogic, which focuses on advanced bank verification that lets lenders qualify borrowers.

Africa

Proven ways you can make money in real estate (Daily Monitor), Rated: A

You can utilise a variety of methods that includes any of the following:
•Seller financing through lease options
•Trading fixed assets such as cars, jewellery and more
•Taking over someone else’s mortgage payments who might be in a distressed situation
•Bringing in an investment partner with cash
•Borrowing from a bank or getting a hard money loan
•Taking out a home equity line of credit
•Utilising a peer-to-peer lending network

Caribbean

Victoria Mutual acquires shares in Barbados-based FinTech Carilend (Jamaica Observer), Rated: AAA

Victoria Mutual Investment Limited (VMIL) has acquired a 30 per cent stake in Carilend, a Barbados-based financial technologies (FinTech) company, that is said to have revolutionised borrowing and lending in the Caribbean.

Authors:

George Popescu
Allen Taylor

The post Thursday September 26 2019, Weekly News Digest appeared first on Lending Times.

Thursday September 5 2019, Weekly News Digest

neobanks

News Comments Today’s main news: LendingPoint closes $178M personal loans securitization. OnDeck hits $879M in online financing in Texas alone. RateSetter adds three products. Funding Circle lenders face longer cash out waits. Yirendai files Form 6-K. Today’s main analysis: International P2P lending volumes for August 2019. Today’s thought-provoking articles: Silicon Valley is building a social […]

The post Thursday September 5 2019, Weekly News Digest appeared first on Lending Times.

neobanks

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United States

United Kingdom

China

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United States

LendingPoint : Closes $ 178 Million Personal Loans Securitization (MarketScreener), Rated: AAA

LendingPoint, the company revolutionizing and democratizing commerce, announced today that it closed its inaugural securitization of consumer loans. LendingPoint Receivables Trust 2019-1 (“LDPT 2019-1”) issued $177.85 million of notes backed by a pool of $187.22 million of direct-to-consumer loans originated on the LendingPoint platform.

The LendingPoint Receivables Trust securitization was rated by Kroll Bond Rating Agency, Inc. and includes $117.76 million of Class A notes rated “A-“, $24.74 million of Class B notes rated “BBB-“, $23.68 million of Class C notes rated “BB-” and $10.67 million of Class D notes rated “B-.” The notes priced at a blended yield of 4.05% per annum and provided for a 95% advance rate. The transaction has a 5% overcollateralization Deposit and a 5% overcollateralization Target. The risk adjusted yield of the receivables securing the notes is expected to be 13.14% per annum.

TyMac Electric Powers Business Success with Online Financing from OnDeck (PR Newswire), Rated: AAA

OnDeck today announced that TyMac Electric of Plano, Texas is its Small Business of the Month for August, 2019.  The 30-person company serves the Dallas-Fort Worth area with high-quality, professionally managed electrical services.

Over the last two years, OnDeck has provided additional financing to TyMac Electric as the business grew to meet demand in the Dallas-Fort Worth commercial marketplace.

Overall, OnDeck has provided more than $879 million in financing online to small business owners in the State of Texas.

2019’s Best & Worst Places to Retire (WalletHub), Rated: AAA

Best Retirement Cities

Overall Rank
(1 = Best)
City Total Score ‘Affordability’ Rank ‘Activities’ Rank ‘Quality of Life’ Rank ‘Health Care’ Rank
1 Orlando, FL 60.87 9 11 68 48
2 Tampa, FL 59.06 10 19 45 95
3 Scottsdale, AZ 58.35 98 22 3 58
4 Charleston, SC 58.30 42 21 56 51
5 Miami, FL 57.21 51 5 105 74
6 Denver, CO 57.08 113 17 43 17
7 Fort Lauderdale, FL 56.58 65 18 82 56
8 Cape Coral, FL 56.50 19 51 15 109
9 Minneapolis, MN 56.46 145 3 58 5
10 Cheyenne, WY 56.06 2 142 50 33

Source: WalletHub

Silicon Valley is building a Chinese-style social credit system (Fast Company), Rated: AAA

Have you heard about China’s social credit system? It’s a technology-enabled, surveillance-based nationwide program designed to nudge citizens toward better behavior. The ultimate goal is to “allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step,” according to the Chinese government.

Many Westerners are disturbed by what they read about China’s social credit system. But such systems, it turns out, are not unique to China. A parallel system is developing in the United States, in part as the result of Silicon Valley and technology-industry user policies, and in part by surveillance of social media activity by private companies.

Fundrise Opportunity Zone Fund Has Raised Over $ 22 Million (Crowdfund Insider), Rated: A

Real estate investment platform Fundrise has raised over $22 million for their Opportunity Fund. The information was revealed in a recent Form D 5o6c filing with the Securities and Exchange Commission (SEC).

Kabbage acquires Radius Intelligence, the marketing tech firm with a database of 20M small businesses (TechCrunch), Rated: A

Data is the new oil, as the saying goes, and today Kabbage — a fintech startup backed by SoftBank that has built a business around lending up to $250,000 to small and medium enterprises, using AI-based algorithms to help determine the terms of the loan — is picking up an asset to expand its own data trove as it looks to expand into further SMB financial services. The company has acquired Radius Intelligence, the marketing technology firm that has built a database of information on some 20 million small and medium businesses in the U.S.

Here is a list of the top nonbank and alternative lenders in 2019 (Business Insider), Rated: A

Nonbanks and alternative lenders have garnered attention in the banking industry due to their ability to partner with legacy banks and utilize technology to make financial transactions more efficient and convenient for users.

Source: Business Insider

Chime now has 5 million customers and introduces overdraft alternative (TechCrunch), Rated: A

Challenger bank Chime has reached 5 million customers in the U.S. The San Francisco-based startup is creating an FDIC-insured mobile bank without any physical branch. The company also promises fewer fees.

Back in March, Chime  said it had 3 million customers when it announced its $200 million Series D round. So that’s 2 million additional customers in roughly 5 months.

Zac Prince of BlockFi (Lend Academy), Rated: A

Even Financial raises $ 25 million to connect banks with channel partners (VentureBeat), Rated: A

Even Financial, a four-year-old New York-based provider of APIs for financial services search, acquisition, and monetization, today announced that it’s raised $25 million in a strategic round of investment co-led by Citi Ventures and MassMutual Ventures, with additional participation from LendingClub. Existing backers American Express Ventures, Canaan Partners, F-Prime Capital, GreatPoint Ventures, and Goldman Sachs also participated in the round, which brings the company’s total raised to $50 million.

Credit Sesame, a platform for managing loans and credit scores, picks up $ 43M en route to IPO (TechCrunch), Rated: A

Credit Sesame — which lets consumers check their credit scores and evaluate options to rebalance existing debts and loans to improve that score and thus their overall “financial health,” in the words of CEO and founder Adrian Nazari — has raised $43 million. With the company already profitable and growing revenues 90% each year for the last five, Nazari said that this round is likely to be the last round the company raises before it goes public.

Household debt in the U.S. continues to rise and as of this year now stands at nearly $14 trillion.

Fintech startup CrowdBureau closes $ 1.1 million Series A equity funding with $ 9.7M valuation (Tech Startups), Rated: A

CrowdBureau Corporation, a fintech startup and index provider, has closed $1.1 million Series A equity funding to expand its series of benchmarks and launch a pilot program for its patent-pending regulatory technology product. The round, which values the company at $9.7 million, was led by Clydagh Limited, Estuary Holdings Ltd. and Alpama Limited along with existing investors.

Some Companies Offer a New Benefit: Payroll Advances and Loans (WSJ), Rated: A

A growing number of companies are helping workers gain access to payroll advances and loans, reflecting concern over the impact money problems are having on productivity levels and worker retention.

Employers including Walmart Inc. and Pima County, Ariz., have recently added these services. The aim is to help cash-strapped employees, many with damaged credit, cover unexpected expenses without resorting to high-cost debt.

Lendingblock Launches Institutional Crypto Lending Platform (Lendingblock), Rated: A

Lendingblock, the regulated, open exchange for institutional borrowing and lending of digital assets, today announces the launch of its institutional lending platform on September 3, 2019. The lending product, which is a reinvented version of securities lending from traditional capital markets, is the first exchange fully dedicated to pure crypto lending and aims to support the needs of the broader cryptocurrency market by providing a secure and liquid venue for lending and borrowing needs of institutional market participants.

Upon launch, Lendingblock platform users will be able to borrow and lend BTC, ETH, PAX and USDT on a fully collateralized basis, for loan terms of 1, 7, 14 and 30 days, with a minimum trade size of $100,000 equivalent of a specified digital asset.

How American Express uses machine learning to detect fraud (American Banker), Rated: A


A financial planner says there’s a ‘huge opportunity’ to build wealth during a recession (Business Insider), Rated: A

As long as you have a cash safety net to fall back on should you lose your job or face an unexpected expense, there’s little reason to panic, says Lauren Anastasio, a certified financial planner at SoFi, a personal-finance company.

Are P2P Loans A Viable Investment for Your Portfolio? (Yahoo! Finance), Rated: A

Peer to peer (P2P) loans allow you to act as a bank, providing loans directly to other individuals or businesses in exchange for a return on your investment via interest payments. Investing in P2P loans, which are typically smaller than a traditional bank loan, has proven to be reliable no matter the economic climate.

Judge Rejects States’ Fintech Charter Challenge, Again (Bloomberg Law), Rated: A

The Office of the Comptroller of the Currency was able to beat back a challenge by state regulators to its proposed charter for financial technology firms for a second time, but the charter remains in limbo due to other litigation.

White Oak Global Advisors Announces Commercial Property Assessed Clean Energy (PACE) Financing Program (GlobeNewswire), Rated: B

White Oak Global Advisors, LLC (“White Oak”) is pleased to announce the California Statewide Communities Development Authority (“CSCDA”) has named White Oak as a commercial PACE Program Administrator for the CSCDA’s Open PACE Program.  As a Program Administrator, White Oak will provide up to 100% financing for energy efficiency, renewable energy, water conservation, and seismic retrofit projects on commercial real estate.

White Oak is seeking to fund projects ranging in size from $500,000 to $150 million.

United Kingdom

RateSetter revamps investment products (P2P Finance News), Rated: AAA

RATESETTER is rejigging its investment products, to boost liquidity and give the peer-to-peer lender more control over market rates.

The three new products, which will be available on 3 October, will be called Access, Plus and Max. Access will offer three per cent interest and no fees to access money; Plus will offer four per cent interest and cost 30 days’ interest to access money; and Max will offer a five per cent interest rate, with a fee of 90 days’ interest to access money.

Funding Circle Amateur Lenders Facing Longer Waits To Cash Out (Morningstar), Rated: AAA

Amateur lenders on peer-to-peer lending platform Funding Circle Holdings PLC are facing waits of 100 days to cash out of their loans, it has emerged.

Investors who provide funding for small businesses through the platform can list old loans for resale to other investors if they wish to withdraw all their money.

But the PA news agency understands that the amount of time taken to re-sell the loan parts has risen from just a few days in January to up to three months in recent transactions.

Funding Circle reveals inclusion in FTSE4Good Index Series (Funding Circle), Rated: A

Funding Circle today reveals its inclusion in the FTSE4Good Index Series, which recognises companies that demonstrate the highest standards of corporate governance and sustainability.

Woodford trust is on the FTSE 250 casualty list (The Times), Rated: B

The investment trust, which focuses on early-stage companies, was one of six companies to be relegated from the second tier of quoted stocks.

Among them is Funding Circle, the online peer-to-peer lender aimed at small and medium-sized companies, which floated at 440p a year ago. Last night its shares closed at 110¼p.

P2PGI blames writedowns and Funding Circle bad debts for poor July (P2P Finance News), Rated: A

P2P GLOBAL Investments has blamed writedowns in the value of two equity stakes and bad debts from Funding Circle for a “disappointing” performance in July.

The alternative finance-focused investment trust delivered a 0.33 per cent NAV return for the month of July, down from 0.48 per cent the previous month. This brought the trust’s year to date return to 2.88 per cent, and 23.93 per cent since inception.

Investors ‘nearly’ double IFISA holdings (AltFi), Rated: A

Small investors have parked £588m across 40,400 accounts by the end of the second quarter of this year, according to trade body the Peer-to-Peer Finance Association (P2PFA).

The compares with around £300m invested in this product 12 months ago across major platforms such as Funding Circle, Ratesetter, Zopa, said the trade body.

Lending Works targets profitability and £10m turnover in 2019 (P2P Finance News), Rated: A

The peer-to-peer consumer lender reported a loss of just over £2.1m for the year ended 31 December 2018, up from £1.41m the previous year, which chief executive Nick Harding (pictured) attributed to a larger wage bill.

There is no requirement for businesses to report revenues in small company accounts, but Harding revealed that the firm saw revenues rise to £6.2m last year and is targeting £10m this year.

Peer to Peer Lender Folk2Folk Tops £300 Million in Lending (Crowdfund Insider), Rated: A

Folk2Folk, a peer-to-peer lender for local, rural and SME businesses, has now surpassed £300 million in lending, according to a company release. Folk2Folk notes that it is the 3rd largest P2P Lender to UK businesses in terms of money lent.

P2PFA boss Paul Smee: ‘Lendy was an outlier that should not have been authorised’ (AltFi), Rated: A

The collapse of Portsmouth-based property peer-to-peer firm Lendy, with outstanding loans of more than £160m, and some £90m in default, prompted the new rules from the FCA. The watchdog is also carrying out an in-depth report into the firm’s failure, which affected with some 21,500 investors. Critics argue that Lendy under competitive pressure wrote poor quality loans to swell its balance sheet, which then turned bad.

However, the Lendy crash, taken together with the poor float of the sector’s biggest firm Funding Circle last October, which languishes 75 per cent below its 440p float price at around 112p this week, has tarnished the sector.

UK Fintech Curve fastest startup ever to reach £4m Crowdfunding on Crowdcube (Fintech Finance), Rated: B

Last month, Curve announced plans to launch a seven figure crowdfunding campaign for early September, with plans to raise £1million. However, just 42 Minutes after launching to pre-registered customers, Curve had raised four times that figure, breaking records in the process. The current overfunding amount stands at £5million.

China

Form 6-K Yirendai Ltd. For: Sep 30 (Street Insider), Rated: AAA

  • Cumulative number of investors served reached 2,185,513, representing an increase of 1% from 2,159,490 in the first quarter of 2019 and compared to 1,974,984 in the second quarter of 2018.
  • Number of active investors in the second quarter of 2019 was 671,957, representing a decrease of 13% from 768,514 in the first quarter of 2019 and compared to 928,251 in the second quarter of 2018.
  • Total assets under management (“AUM”) for Yiren Wealth was RMB 43,604.2 million (US$ 6,351.7 million) as of June 30, 2019, representing a decrease of 7% from RMB 46,663.1 million as of March 31, 2019. Average AUM per investor reached RMB 149,480 (US$ 21,774) as of June 30, 2019, representing an increase of 7% from RMB 139,473 as of March 31, 2019.
  • AUM of non-P2P products amounted to RMB 354.3 million (US$ 51.6 million) in the second quarter of 2019, representing a decrease of 23% from RMB 457.7 million in the first quarter of 2019 and compared to RMB 951.0 million in the second quarter of 2018. Non-P2P products include money market funds, mutual funds and insurance.

Consumer Credit—Yiren Credit

  • Total loan originations in the second quarter of 2019 reached RMB 9.7 billion (US$1.4 billion), representing a decrease of 12% from RMB 10.9 billion in the first quarter of 2019 and compared to RMB 18.2 billion in the second quarter of 2018.
  • Cumulative number of borrowers served reached 4,491,466, representing an increase of 2% from 4,404,812 in the first quarter of 2019 and compared to 4,027,254 in the second quarter of 2018.
  • Number of borrowers in the second quarter of 2019 was 135,246, representing a decrease of 10% from 149,715 in the first quarter of 2019 and compared to 267,628 in the second quarter of 2018.
  • The percentage of loan volume generated by repeat borrowers was 35.9% in the second quarter of 2019.
  • 52.5% of loan originations were generated online in the second quarter of 2019.
  • Remaining principal of performing loans reached RMB 58,071.3 million (US$8,459.0 million) as of June 30, 2019, representing a decrease of 8% from RMB 63,213.8 million as of March 31, 2019.

Yirendai Ltd. (YRD) Q2 2019 Earnings Call Transcript (The Motley Fool), Rated: AAA

As of September 2019, the line of credit we have obtained from our institutional partners has increased from RMB19 billion in Q1 2019 to close to RMB30 billion. We are now working with approximately 10 partners, including leading joint stock and city commercial banks. We expect loan origination funded by institutional partners to reach approximately 30% by the end of this year.

China Rapid Finance Retains China Merchants Bank New York and Pangaea Finance as Co-Financial Advisors for Recapitalization and Restructuring (Yahoo! Finance), Rated: AAA

China Rapid Finance Limited (XRF) (the “Company”) today announced that its Board of Directors has retained China Merchants Bank Co., Ltd., New York Branch (CMBNY), and Pangaea Finance as separate Co-Financial Advisors, and Pangaea Finance as Structuring Agent, to advise it for strategic alternatives, including but not limited to potential strategic partnerships, recapitalization of certain operating companies, and for a related reconfiguration of the Cayman company as a listed investment vehicle for China credit.

Central bank to include troubled P2P lending industry in credit system (Technode), Rated: A

China’s central bank will include the country’s troubled online peer-to-peer (P2P) lending platforms in its credit reference system as the clampdown on illegal financial services continues, Chinese state-run media reported on Wednesday.

China’s credit system to cover P2P lending in tightening regulation (Xinhua), Rated: A

P2P lending platforms in operation will provide certain information such as online lending interest rates to credit reference agencies such as operators of financial credit information basic databases and Baihang Credit, China’s only licensed and market-oriented personal credit agency, according to an official guideline.

China Central Bank’s Credit System to include P2P Lending Platforms amidst tightening regulations (China Knowledge), Rated: A

Credit information of P2P lending platforms will be collected, regardless of their operational status. New penalties will also be imposed on defaulting borrowers of P2P online lending. Some of the penalties include higher loan interest rates and restriction limits to loan and insurance services.

Chinese entrepreneur among 41 arrested over illegal P2P platform (CGTN), Rated: A

Property mogul and founder of a leading Shanghai contemporary art museum Dai Zhikang has turned himself into police following the collapse of a peer-to-peer lending platform, as China continues to crackdown on illegal online lending.

Shanghai police confirmed Monday that Dai, the founder and head of Zendai Group, was among 41 people being investigated over illegal fundraising through an online P2P platform called Laocaibao.

European Union

Revolut is looking to hire 400 customer support staff following compliance complaints (Business Insider), Rated: AAA

Revolut is looking to hire up to 400 staff at a new base in Portugal, a move that will increase its employee headcount by almost a third.

Source: Business Insider

German online bank N26 expands to Switzerland (Verdict), Rated: A

German online bank N26 has launched its services in Switzerland, as it continues to build up its footprint across the globe.

Binance Crypto Lending Program expansion – a bad idea for traders (FX Street), Rated: A

Binance is one of the latest entries in launching its crypto lending platform on August 28. In the first phase, it began with a short period fixed return on Binance (BNB), USDT (Tether) and Ethereum Classic (ETC). It provides an annual return of 15%, 10%, and 7% respectively, beginning with a 14-Day fixed period. Binance starts with about $30 million in crypto-lending. Moreover, the annual interest offered is higher than the return from banks.

International

International P2P Lending Volumes August 2019 (P2P-Banking), Rated: AAA

Milestones in culumulative volume lent crossed this month:

  • Bondora: 250M EUR
  • Fellow Finance: 500M EUR
  • Mintos: 3000M EUR
  • Thincats: 500M GBP

The total volume for the reported marketplaces in the table adds up to 634 million Euro. I track the development of p2p lending volumes for many markets.

Source: P2P-Banking

Fall Conference Season for Fintech Kicks Into Gear This Month (Lend Academy), Rated: AAA

ABS East

When: Sept 22-24, 2019
Where: Miami, FL
Link:  /> Discount code: LEND10

Lend360

When: Sept 25-27, 2019
Where: Dallas, TX
Link: 

LendIt Fintech Europe

When: Sept 26-27, 2019
Where: London, UK
Link: 
/> Discount code: LENDACADEMYVIP

Moneyconf

When: Nov 4-7, 2019
Where: Lisbon, Portugal
Link: 

Money2020 China

When: Dec 4-6, 2019
Where: Hangzhou, China
Link: 

I WISH I’D BOUGHT IT WITH KLARNA (The Drum), Rated: B

The Swedish ‘pay later’ service, Klarna has launched its first international campaign – ‘I wish I’d bought it with Klarna’ – with the internet sensation Celesta Barber as its leading lady.

Australia

Ethereum lossless lottery PoolTogether is still innately flawed despite updates (finder), Rated: A

How do you encourage people to practice responsible saving? Easy. You shake it up with a dose of randomness and call it a lottery instead. This is the basic principle behind Pool Together, a lossless lottery designed in such a way that there are no losers. The idea is that everyone always gets back the price of their ticket, but one lucky person walks away with a lot more than that.

Pool Together is built on Ethereum, and utilises the Dai stablecoin in combination with the Compound crypto lending system.

India

Online lender Namaste Credit launches digital-only bank (Finextra), Rated: AAA

Online lending marketplace Namaste Credit today said that it is launching its Neobanking solutions for MSMEs, becoming a full-fledged “Digital-Only Bank” with a foundational SaaS play.

IndiaMoneyMart opens the first East-India branch for NBFC-P2P Lending (United News of India), Rated: A

Making sense of regulatory sandbox for Fintech startups (Vantage Asia), Rated: A

Over the past few years India has seen rapid development in the financial technology sector and it has the second highest number of Fintech startups in the world. According to certain estimates, India’s Fintech sector added about 1,300 startups from 2015 to 2018. According to the National Association of Software and Services Companies, India’s Fintech market is expected to be worth US$2.4 billion by 2020.

India Government Panel Pushes for Fintech, Regtech Adoption (Regulation Asia), Rated: A

The panel has also proposed the development of a marketplace model for P2P lending, and the introduction of virtual banking in India.

Why fintech panel believes P2P platforms can ease credit supply (India Times), Rated: A

While the importance of P2P lending sector in India is understood by all stakeholders, and a lot has been done over the last few years to encourage the sector, a lot more needs to be done to accelerate its growth.

APAC

Leading Southeast Asian Peer to Peer Lender Funding Societies Revamps with New Executive Team (Crowdfund Insider), Rated: AAA

Funding Societies, one of the largest peer-to-peer (P2P) lending platforms in Southeast Asia, has revamped its executive team with new hires.

Matt Lambie joins as the Chief Technical Officer, Dheeraj Chowdhry as the Chief Executive Officer and Jared Goldberg as the Chief Data Officer.

Top 10 APAC Startups Reigning the Future Finance Industry (Banking CIO Outlook), Rated: A

Africa

AlphaCode of South Africa Invests $ 1.5 Million in Three Domestic Fintech Startups (CryptoNewsZ), Rated: AAA

AlphaCode is the incubation and investment arm of Rand Merchant Investment Holdings, and in a new development, the company has decided to invest a combined $1.5 million in three separate Fintech startups in South Africa. The companies in question are Zande Africa, which is a platform meant for merchant finance, while the others are Bright On Capital, a peer to peer lending firm and Livestock Wealth, an agricultural investment startup. AlphaCode invested $655,000 each on Bright On Capital and Zande Africa, while Livestock Wealth got an injection of $131, 000.

Authors:

George Popescu
Allen Taylor

The post Thursday September 5 2019, Weekly News Digest appeared first on Lending Times.

Webinar: Changes and Challenges Impacting Fintech Companies

Manatt

This past year, significant efforts have been made by the SEC, FINRA, state regulators and CSBS to streamline regulations and processes for all fintech companies. These ongoing changes have presented opportunities and challenges that impact the fintech community around the globe. Please join us for a 60-minute webinar, moderated by Manatt’s fintech leader Brian Korn, […]

The post Webinar: Changes and Challenges Impacting Fintech Companies appeared first on Lending Times.

Manatt

This past year, significant efforts have been made by the SEC, FINRA, state regulators and CSBS to streamline regulations and processes for all fintech companies. These ongoing changes have presented opportunities and challenges that impact the fintech community around the globe. Please join us for a 60-minute webinar, moderated by Manatt’s fintech leader Brian Korn, to gain insight to the following key topics:

  • Updates on the bank partnership model
  • The latest on charter options, including the OCC fintech charter and ILCs
  • The state and federal enforcement agenda, including rapidly growing FTC activity
  • SEC/FINRA Joint Statement on Custody and Customer Protection Rules for cryptocurrency and digital investments: Paradigm shift or more of the same?
  • State fintech regulatory sandboxes: What are they exactly, and will more states continue to opt in?
  • Deal terms: How the regulatory environment is driving investor and lender behavior for originators

If you can’t make our live program on September 19, click here.

The post Webinar: Changes and Challenges Impacting Fintech Companies appeared first on Lending Times.

Thursday May 16 2019, Weekly News Digest

consumer debt

News Comments Today’s main news: iintoo picks the meat off the bones of RealtyShares. Kabbage, Affirm, SoFi among CNBC’s Disruptor 50. LendInvest cuts rates, product fees. Tencent profits, revenues surge. Pleo raises $56M. Prospa closing in on IPO. Paytm offers credit card. Today’s main analysis: LendingTree Personal Loan Offers Report. Is POS trend putting pressure […]

The post Thursday May 16 2019, Weekly News Digest appeared first on Lending Times.

consumer debt

News Comments

United States

United Kingdom

Asia

Other

News Summary

United States

This crowdfunding firm just picked the carcass of RealtyShares (The Real Deal), Rated: AAA

New York-based iintoo acquired RealtyShares’ assets, Inman reported. The move boosts the company’s portfolio size to $2.5 billion assets under management from $1 billion, according to the company.

Current and former investors in RealtyShares will be able to access iintoo’s crowdfunding platform, the report said. The deal — terms of which were not disclosed — is a joint venture between iintoo and Texas-based real estate firm RREAF Holdings, LLC, which will manage the investment porftolio.

Meet the 2019 CNBC Disruptor 50 companies (CNBC), Rated: AAA

14. Kabbage

Founders: Rob Frohwein (CEO), Kathryn Petralia (President), Marc Gorlin
Launched: 2009
Headquarters: Atlanta
Funding:
 $489 million
Valuation: $1.2 billion (PitchBook)
Key technologies:
 Artificial intelligence, cloud computing, machine learning
Industry: 
Credit, financial services, lending

26. SoFi

So far, 600,000 members, $30 billion in loans

33. Affirm

Founders: Max Levchin (CEO), Nathan Gettings, Jeff Kaditz
Launched: 2012
Headquarters: San Francisco
Funding:
 $800+ million
Valuation: $3 billion (PitchBook)
Key technologies:
 Machine learning, software-defined security
Industry: 
e-commerce, financial services, fintech

New LendingClub Account Performance – Q1 2019 (Lend Academy), Rated: AAA

In April 2018, LendingClub provided us with $5,000 to open a brand new account. Since then we have been chronicling the status of the account on a quarterly basis. Below are links to the full series of blog posts in chronological order:

Source: Lend Academy

Personal Loan Offers Report – April 2019 (LendingTree), Rated: AAA

Excellent credit (760+ score): Offered APRs to consumers with a credit score of 760+ averaged 9.23% in April.

  • The average best APR offered to all borrowers with credit scores of 760 or above was 9.23%, an increase of 13 basis points from the prior month and an increase of 188 basis points from the same period one year ago.
  • At $20,810, the average loan amounts offered with the best APRs to all borrowers with a score of 760 was up 0.33% ($69) from last month, and down 9.44% ($1,964) from the same period one year ago.
  • The top 10% of offers, presented to borrowers with the best profiles within this group, had offered APRs of 5.15% on average, and loan amounts of $19,489. A borrower with this APR and loan amount would save $1,565 by consolidating debt with a 10% APR over a three-year term.

Is the Point-of-Sale Trend Putting Pressure on Plastic? (Markets Insider), Rated: AAA

The latest entrant to the credit market, point-of-sale loans, may be shaking up how consumers finance large purchases. According to the TransUnion (NYSE: TRU) Q1 2019 Industry Insights Report, this phenomenon, combined with the popularity of credit card reward programs, may be particularly taxing for the private label card category.

Year-over-Year Origination Growth

Card Type Q4 2018 Q4 2017 Q4 2016 Q4 2015 Q4 2014 Q4 2013
Private Label -5.5% -6.7% -3.8% -0.1% 4.1% 9.2%
 Bankcard 2.9% 0.1% -4.4% 15.1% 7.4% 18.1%

Q1 2019 Credit Card Trends

 

Credit Card Lending Metric

Q1 2019 Q1 2018 Q1 2017 Q1 2016
 Number of Credit Cards 432.8 million 416.5 million  405.8 million 386.4 million
Borrower-Level Delinquency Rate (90+ DPD)  1.89%  1.78%  1.69%  1.50%
Average Debt Per Borrower $5,554 $5,472 $5,332 $5,193
Prior Quarter Originations* 16.5 million 16.0 million 16.0 million 16.7 million
Average New Account Credit Lines* $5,296 $5,283 $5,262 $5,091

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Growth in Personal Loans Led by Super Prime Consumers

Personal loan balances continued to climb in Q1 2019, growing 19.2% year over year to a new high of $143 billion. Over the past four years total balances have nearly doubled, growing from $72 billion in Q1 2015. Growth is occurring across all risk tiers with originations increasing 9.7% to 5.0 million in Q4 2018.  Super prime borrowers had the largest growth on the origination front with an increase of 22.5% year-over-year, compared to 19.5% over the same period last year.

Q1 2019 Unsecured Personal Loan Trends

 

Personal Loan Metric

Q1 2019 Q1 2018 Q1 2017 Q1 2016
 Total Balances $143 billion $120 billion $102 billion $93 billion
Number of Unsecured Personal Loans  21.4 million 19.2 million 16.9 million 15.4 million
Number of Consumers with Unsecured Personal Loans  19.3 million 17.6 million 15.7 million 14.7 million
 Borrower-Level Delinquency Rate (60+ DPD) 3.47%  3.51% 3.72% 3.59%
 Average Debt Per Borrower $8,618 $7,986 $7,603 $7,544
 Prior Quarter Originations* 5.0 million 4.6 million 3.7 million 4.1 million
Average Balance of New Unsecured Personal Loans* $5,432 $5,044 $5,132 $5,077

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Credit Card Loan Performance (PeerIQ), Rated: AAA

US consumer credit grew by $10.3 Bn in March, at a 3.1% annualized rate, the slowest in nine months. Revolving credit outstanding decreased by $2.18 Bn indicating that consumers ended the quarter more cautious about borrowing. US GDP growth has been propelled by rising consumer spending and a slowdown could put a dampener on growth.

Source: Bloomberg, PeerIQ

30 and 90-day delinquency rates from credit card master trust data

Source: Bloomberg, Bank Credit Card Trust Data, PeerIQ

Declining Credit Enhancement in US MPL ABS is Unwarranted (Crowdfund Insider), Rated: A

Fitch is out with a report on marketplace lending (MPL) asset-backed securities (ABS) stating declining credit enhancement is unwarranted.

Fitch states that credit enhancement (CE) levels of ‘Asf’ category rated US MPL ABS have meaningfully declined since 2017, while asset quality remained relatively steady. As a result, bondholders of more recently issued transactions have less loss protection for the same amount of asset risk.

PeerStreet Reports Accelerating Growth as the Real Estate Platform Tops $ 2 Billion in Property Lending (Crowdfund Insider), Rated: A

This past March, PeerStreet, a real estate crowdfunding platform, announced that it had topped $2 billion in transactions and over $1 billion in Assets Under Management. Three months early in January, that transaction number stood at $1.7 billion. If that pace holds, PeerStreet should be nearing $3 billion in transactions by the end of the year thus firmly establishing itself as a leading property lending platform. While some sectors of real estate crowdfunding have struggled, PeerStreet does not appear to be one of them.

WealthStone Announces Real Estate Platform (Yahoo! Finance), Rated: A

WealthStone LLC announces the formation of its new real estate platform.

Typical investments require between $10 million to $100 million in total capitalization per project, including prudent leverage. These assets are expected to provide a total annualized return of 10% to 12%, including an annual cash dividend of 5% to 8% to the equity invested in its projects.

WealthStone aims to allocate approximately $300 million of equity capital for an estimated $700 million of total investments in a variety of real estate ventures during its current deployment phase.

Fintech seeks to help customers avoid overdrafts — with assist from a big bank (American Banker), Rated: A

The savings app provider Digit on Tuesday unveiled an instant withdrawals feature that will let users move money from their Digit account to their bank account instantly. This can help them meet emergencies and avoid incurring overdraft fees and resorting to payday loans.

Startup Launches To Combine All Of Your Credit And Debit Cards Into One Digital Card (Forbes), Rated: A

Forget checking your balance on your mobile phone. Startup Binji wants you to use your debit card instead.

In stealth mode for the past twelve months, the Irvine, California fintech is launching a debit Mastercard that enables consumers to consolidate as many as twenty-four credit cards and debit cards into a single account.

Connecting the Unbanked to A Friendlier Ecosystem (Cryptopolitan), Rated: A

P2P lending platforms like AssetStream are introducing significant improvements in the world of financing, which makes lending and borrowing friendlier and more easily accessible services.

How do We Empower a Growing Number of Small Enterprises? (Cryptopolitan), Rated: A

To be exact, if a company with relatively worse credit score applies for a large loan, let’s say $1 million, they’re more likely to be approved than a smaller, more trustworthy company that applied for a $100,000 on the same terms.

Data privacy, AI, regulation: Small-business lending is changing fast (American Banker), Rated: A

“We used to have 14,000 banks. When I started at the SBA, we were down to about 8- or 9,000 banks. Now we’re down to 5,000 banks.”

Much of the technology that is transforming how small-business lending gets done is coming from fintechs, and Mills sees “the next wave of the fintech evolution” as a partnership between these innovators and banks. “Particularly small banks,” she says.

Listen to the podcast here.

Goldman Sachs execs are opening up about their plans for Marcus (Business Insider), Rated: A

The bank has made more than $5 billion in consumer loans since making the first loan in October 2016. It has also attracted more than $46 billion in deposits.

Talwar’s comments may foreshadow the next phase of Marcus’ growth, which will center on three pillars:

1. Free financial-management software offered by Clarity Money, which was bought by Goldman last year and is likely to be rebranded at some point.

2. Direct-to-consumer products such as loan and deposit products, potentially in addition to wealth-management and insurance products.

3. Strategic partnerships.

Walmart Offers Even.com To Improve Employee Financial Health (Forbes), Rated: A

Although Even.com can let Walmart employees access their wages ahead of payday, that is its least important features, according to its CEO, Jon Schlossberg. For $8 a month — like many employees Walmart pays a share of the fee — it aims to improve financial wellness. It shows  users with a glance at a smart phone how much they have left to spend safely and helps them save for specific goals.

Millennials Are Helping to Sound the Credit Card Alarm (Bloomberg), Rated: A

First, the charge-off rate among card issuers in the first quarter increased to the highest level in almost seven years. The figure is effectively a gauge of “bad debt” — it reflects the percentage of loans companies have concluded will never be repaid. As Bloomberg News’s Jenny Surane noted last month, executives like Capital One Financial Corp. CEO Richard Fairbank chalked that up to the length of this economic expansion causing some negative credit events during the financial crisis to disappear from credit bureau reports, essentially making risky borrowers look stronger.

Crypto Startup Launches Bitcoin Term Deposit Offering 9% Annual Interest (CryptoGlobe), Rated: A

A Delaware-based cryptocurrency startup called BitLeague has recently launched a Bitcoin term deposit product designed to bring mainstream-like services to the crypto economy and attract new users.

The move was announced at Consensus 2019 and, according to a press release, the term deposit will offer 9% annual interest, with a lock-in period of 3 to 36 months.

Human Rights Watch Comment on CFPB Proposal (HRW.org), Rated: A

According to research by the Pew Charitable Trusts, approximately 12 million Americans take out payday loans and 2.5 million take out vehicle-title loans each year.[3] The short-term nature of these loans and their repayment structure drive about 80 percent of borrowers to re-borrow frequently and repeatedly pay fees to refinance their accumulated debt.[4]  The 2017 rule establishes logical baselines for consumer protection, including by requiring lenders to verify that borrowers have the ability to repay the loan and its associated fees prior to issuing a loan.

The vast majority, around 73 percent, of survey respondents reported household incomes under US$40,000, with an average of two children each, and nearly half had taken out a payday, auto title, or both types of short-term loans. People reported taking out loans most often to cover unexpected expenses, but also for their everyday expenses and groceries. More than half of those who took out a loan said they had trouble repaying their loans and associated fees.[8]

Fintech charter delayed following court ruling: Otting (American Banker), Rated: A

In a recent sit-down with American Banker, Otting said he no longer expects to have a fintech firm formally apply for the new special purpose bank charter in the second quarter of the year, after a federal judge ruled May 2 that the New York State Department of Financial Services could continue with its case to invalidate the charter.

Accomplished Human Resources Executive Joins Online Small Business Lender (OnDeck), Rated: B

OnDeck today announced the appointment of Deb Stroff as the company’s Chief People Officer.  Ms. Stroff will be responsible for leading all aspects of people strategy, including overseeing organizational design, total rewards, talent management, recruiting, leadership development and learning, as well as driving the talent agenda forward as OnDeck continues to grow in scale and complexity.

Roostify and Docutech Join Forces to Amplify the Consumer Experience (Roostify), Rated: B

Roostify announced the finalization of its integration with Docutech, a provider of document eSign, eClose and print fulfillment technology.

By joining forces with Docutech, Roostify consumers can now view, complete, and eSign documents, all within the Roostify platform.

CrowdStreet Appoints Award-Winning FinTech Innovator Donna Wells to its Advisory Board (Yahoo! Finance), Rated: B

CrowdStreet, Inc., a technology provider with an online marketplace for direct equity investment in commercial real estate (CRE), today announced the appointment of financial technology entrepreneur Donna Wells to its Advisory Board. The news comes on the heels of the company passing the $500 million threshold in total online investments with a record number of new individual investors.

Cadre Expands Executive Team, Appointing Sam Mischner as Chief Commercial Officer (Yahoo! Finance), Rated: B

Cadre announced today that Sam Mischner has joined the company in the role of Chief Commercial Officer. Mischner brings expertise in strategic sales and operational excellence to Cadre, where he will oversee marketing, sales, and operations.

LendingPoint CEO Chosen as Entrepreneur of the Year Finalist Southeast by EY (BusinessWire), Rated: B

LendingPoint is excited to announce that CEO and founder Tom Burnside was selected as a finalist for EY’s Entrepreneur of the Year Southeast. The program recognizes entrepreneurs in more than 145 cities around the world who demonstrate excellence and extraordinary success in areas such as innovation, financial performance, and personal commitment to their businesses and communities.

United Kingdom

LendInvest cuts rates and product fees (Mortgage Introducer), Rated: AAA

LendInvest has dropped its product fees and lowered interest rates for both of its 5-year fixed rate buy-to-let remortgage products for a limited time.  

The products will be available on standard property cases up to 75% loan-to-value and up to £250,000 in loan size.

The products are offered at an interest rate of 3.60%, with the ICR calculated at the pay rate, or at an interest rate of 3.49% with the ICR calculated at 5%. Both products will have zero product fee.

CapitalRise secures new institutional funding line to write larger loans (AltFi), Rated: A

Specialist property lending platform CapitalRise has secured a £30m institutional funding line from a major financial institutional investor, as it looks to expand its loan book.

The new £30 million facility was received from a UK bank, whose name is undisclosed.

OakNorth completes £30m loan-on-loan facility with Hilltop Credit Partners (Fintech Finance), Rated: A

OakNorth – the bank for entrepreneurs, by entrepreneurs – has completed its first finance deal with Hilltop Credit Partners, a specialist funding partner for small and mid-sized residential property developers and housebuilders.

The £30m loan-on-loan facility will be used to support the recently launched real estate development lending platform, led by Paul Oberschneider, who has more than 25 years of experience in property development and asset management. Backed by Round Hill Capital, a global real estate investment firm with a focus on macro-driven residential real estate investment strategies, Hilltop Credit Partners aims to help developers who know their local markets but need access to tailored financing solutions in order to fund their projects.

Crypto lending platform for business launches this month (Yahoo! Finance), Rated: A

London-based financial services firm Mode has announced its first product – a crypto-backed lending platform for businesses – will launch later this month.

The company is aiming to become the UK’s first fully-regulated digital-asset bank as it works on building an ecosystem of products and services designed to bridge the gap between digital and traditional finance.

The service is aimed at companies which hold Bitcoin and Ethereum – whether through direct purchase, investment, or as payment from clients.

How to Build Your Own Startup with Micro-financing? (Cryptopolitan), Rated: A

A report on This is MONEY shows that more than 50% of UK startups with less than 50 employees were rejected for bank loans. More so, 37% of SMEs are likely to give up their search for loans after their first approach is rejected.

P2P investing not always ‘high-risk’ (FT Adviser), Rated: A

Imagine an asset class where investor returns have been overwhelmingly positive every year since its inception and incredibly stable, hovering around the mid-single digits, without the rollercoaster of the stock market.

OakNorth completes £2.5m loan to multi-site specialist school, Cressey College (fe news), Rated: B

OakNorth completes £2.5m loan to multi-site specialist school, Cressey College, to support the groups growth strategy.

Finastra appoints Mark Miller as Chief Financial Officer (Virtual Strategy), Rated: A

Finastra has announced the appointment of Mark Miller as Chief Financial Officer (CFO) effective May 13, 2019.

Mark is a seasoned finance executive, with nearly 25 years of global technology, finance and operational experience. He has worked at several industry-leading companies including, most recently, Marketo, where he was CFO and travel technology firm Sabre Corporation, where he spent 18 years in a number of leadership and executive roles including CFO.

China

Tencent profit tops forecast as fintech and cloud revenues surge (Reuters), Rated: AAA

Tencent Holdings Ltd posted record quarterly profit on Wednesday, smashing market expectations, as the social media and gaming giant booked a rise in the value of its investments while fintech and cloud revenues helped make up for declines in games.

In the three months ended March, Tencent saw 17% growth in net profit to 27 billion yuan ($3.93 billion), beating the 19.4 billion yuan average of 13 analyst estimates compiled by Refinitiv.

Boosting profit was a 46% rise in “net other gains”, such as from investments, to 11.1 billion yuan. Revenue, however, came in just shy of analyst estimates at 85.5 billion yuan, with growth at an all-time low of 16%.

European Union

Business card management platform Pleo raises $ 56m (Fintech Futures), Rated: AAA

Fintech Pleo, the business spending platform based around smart company cards, has raised $56 million in a Series B financing round led by Stripes, a New York-based growth fund.

Pleo will use the funding round to more than triple its headcount, from 120 to 400 employees by the end of 2020 and to accelerate product development as it aims to service the entire purchase process for SMEs across the whole of Europe. This includes adding credit, invoices, mobile payments, a vendor marketplace, VAT reclaim and more.

International

More global banks commit to Finastra’s Fusion LenderComm (Realwire), Rated: A

Finastra has signed three global banks on its Fusion LenderComm platform as part of a coordinated campaign, including BNP Paribas, Natixis and Societe Generale. With NatWest, which joined recently, the ramp up signals a move towards a new era of efficiency in this complex space.

How to capture Gen Z spend (Drapers Online), Rated: A

In a survey, 58% told Klarna that they would pay more than $5 (£3.90) for one-hour delivery – if brands cannot compete, then consumers will take their custom elsewhere.

Leading the way in terms of sustainability, 72% said they would pay more for sustainably sourced products, 55% would abandon a purchase if it was not sustainable, and 83% said it is important that brands prove be “pro-equality”.

Klarna found that most of this generation still frequent the high street, and do so more than any other age group.

Australia

Prospa IPO books close; on track for June 11 listing (AFR), Rated: AAA

Investment banks Macquarie and UBS are set to underwrite Prospa’s $610 million sharemarket float after running a bookbuild to sell the shares.

The brokers closed the bookbuild at 2pm on Wednesday and funds were told the lead managers had secured enough support to raise the $110 million required for Propsa’s initial public offering.

Home loan discount frenzy drives bargains for borrowers (Mozo), Rated: A

Popular online lender Tic:Toc has launched a $1,000 cashback offer for all new customers, while competitor loans.com.au has dropped its variable rate below 3.50% to match Tic:Toc’s ultra low rates. Homestar has a competitive low rate plus fee waiver offer on the market, while Virgin Money is enticing new customers with Velocity rewards points.

India

India’s largest mobile wallet company Paytm now offers a credit card (TechCrunch), Rated: AAA

The firm, operated by One97 Communications, today unveiled Paytm First Credit Card with lofty benefits as it races to bulk up its financial offerings. The cards, issued by Citi Bank, will be the first in the country to offer unlimited, one percent cashback on purchases, Paytm claimed in a statement. The company is hoping to rope in about 25 million credit card customers in the coming months.

The penetration of credit cards remains very low in India with under 50 million peoplepossessing one.

SIDBI’s pilot scheme for fintech NBFCs to boost digital lending (Business Line), Rated: A

To give a fillip to digital lending, Small Industries Development Bank of India (SIDBI) has put together a pilot scheme to extend financial assistance of up to 10 crore to new-age fintech non-banking finance companies (NBFCs) engaged in financing small businesses and other income-generating activities.

Asia

P2P lending in Vietnam (krASIA), Rated: AAA

In Vietnam, where the economy is booming, approximately 79% of the population is unbanked. Without a banking account, it is almost impossible for people to access financial services such as insurance and loans. The phenomenon is called “financial exclusion.”

The country has an internet penetration rate of 67%, higher than the region’s average of 58%, and nearly three-quarters of the adult population owns a smartphone.

Vietnam is fertile ground for massive fintech adoption, particularly in peer-to-peer (P2P lending).

P2P Lending to Overcome Financial Exclusion (SME Magazine), Rated: A

The global P2P market is estimated to be worth US$490 billion in 2020. By then, Vietnam’s own P2P market is expected to be US$7.8 billion, almost doubling from US$4.4 billion in 2017 according to estimates by APAC-focused consulting firm Solidiance. Currently, there are over 40 P2P lenders operating within Vietnam; several of which are prominent due to their size and reach.

Innoven Capital pulls in USD 200 million from Temasek and UOB (krASIA), Rated: A

Singapore-headquartered venture debt firm Innoven Capital received an additional USD 200 million in funding from its shareholders – Temasek Holdings and United Overseas Bank (UOB). The firm said it’s doing this in anticipation of the massive potential that Asia’s venture debt space offers.

Canada

Koho Secures $ 42M in Series B Funding (Finsmes), Rated: AAA

Koho, a Toronto, Canada-based fintech company that provides Canadians with a mobile current account and Visa card, closed a $42m Series B funding round.

Authors:

George Popescu
Allen Taylor

Business card management platform Pleo raises $56m

The post Thursday May 16 2019, Weekly News Digest appeared first on Lending Times.

Thursday March 28 2019, Weekly News Digest

structured debt

News Comments Today’s main news: Klarna launches open banking platform. SoFi re-engineers home loans. Apple’s new credit card. OakNorth secures guarantee of $133M. Qupital raises $15M to bumrush China. Today’s main analysis: Arbuthnot Banking Group audited final results for 2018. Today’s thought-provoking articles: U.S. yield curve, new fintech products. Cities with most overleveraged mortgage debtors. Household debt. Expanding access to credit […]

The post Thursday March 28 2019, Weekly News Digest appeared first on Lending Times.

structured debt

News Comments

United States

United Kingdom

International

Other

News Summary

United States

SoFi Refreshes Home Loans, Making Home Buying Painless and Paperless (PR Newswire), Rated: AAA

Today, SoFi announced the refresh of its mortgage offering as SoFi Home Loans, complete with a reengineered process that helps people buy or refinance a home with an online application, no hidden fees, or prepayment penalties.

SoFi Home Loans offer competitive rates including affordable down payments, with as little as 10% down on loans up to $3MM, with no hidden fees or prepayment penalties. SoFi allows applicants to choose between four different loan terms and fixed or adjustable rates. Those interested in refinancing can choose between traditional mortgage refinancing, cash-out refinancing, and student loan cash-out refinancing. If SoFi Home Loans isn’t able to handle a loan request, SoFi provides an easy option to digitally transfer member information to its affiliate partner who may be able to help.

Apple’s new credit card keeps advisors guessing (Financial Planning), Rated: AAA

The Apple credit card is the latest offering by a Silicon Valley tech giant looking for a ready-made avenue into the financial services’ sector. While the new card mostly benefits loyal users of Apple products, it’s also an unwelcome reminder of an ever present question on the minds of wealth managers: Will the FAANG companies like Facebook, Amazon, Apple, Netflix and Alphabet continue their land grab of services historically provided by the financial services industry — and at what cost to traditional RIAs?

Ominously, a majority of investors considering switching financial services providers said they would consider banking with a tech company like Facebook, Google or Amazon if they could, according to a recent survey by Novantis.

US Yield Curve Inverts; New Products from FinTechs (PeerIQ), Rated: AAA

For the first time in 3,000 days, and with much anticipation, the 3-month and 10-year treasury curve inverted. The median time to a recession after this curve inverts is between 1 to 1.5 years. However, unprecedented interventions such as QE (and higher central bank holdings globally) make it difficult to draw hard and fast conclusions. Market participants are pricing in a 41% probability of an interest rate cut in the September meeting.

Source: PeerIQ; Bianco Research

New Products from FinTechs

FinTech innovation continues with new products from PeerStreet and Figure. PeerStreet has launched a 30-year loan to enable private investors to buy rental properties. Residential for Rent loans are targeted towards rental home operators. The rental market in the US has grown exponentially post-crisis people struggle to buy homes. The number of rental homes has grown from 36 Mn in 2006 to 43 Mn in 2017.

Source: FactTank, PeerIQ

2019’s Cities with the Most Overleveraged Mortgage Debtors (WalletHub), Rated: AAA

Buying a home represents an important milestone for most consumers. But for those who dive in to the deep end of real estate without a financial safety net, the decision could lead to buyer’s remorse in the long run. Mortgage rates are slowly falling after reaching their latest peak in November 2018, and are close to the lowest they’ve been in the past 3 decades. This makes 2019 a tempting time to buy a home. Some industry experts believe 2019 is friendlier toward buyers than sellers because of the lower rates.

Source: WalletHub

Household Debt – Mixed Signals (DBRS), Rated: AAA

The most recent Quarterly Report on Household Debt and Credit issued by the Federal Reserve Bank of New York (the Fed) and Equifax Inc. (Equifax) showed that household debt rose for the 18th consecutive period during Q4 2018 to $13.5 trillion, $869 billion higher than the peak reached in 2008. This represented the third-smallest increase (0.24%) over the 18 consecutive periods of growth, partly because of decreasing mortgage loan debt during Q4 2018 to $9.2 trillion from $9.4 trillion at the end of Q3 2018 and flat levels of auto loan debt at $1.3 trillion for both Q3 and Q4 2018.

Expanding Access to Credit in the Land of New “Halves” (Lend Academy), Rated: AAA

Credit is one of the largest, most powerful, lucrative and important industries in the world. It also is one of the best tools for wealth creation – home ownership, small business ownership and growth, and, leveraged investing.  This is readily accessible for prime consumers with more options now than ever before. But for the other half of the country that is non-prime, options are still limited and in many cases non-existent.

Early pioneers of securitizations like SoFi, the scaling of marketplace lending like Lending ClubProsper and Best Egg, and new distribution models like Greensky and Affirm have contributed towards increasing comfort of these “new asset classes” that were mostly locked up in bank’s balance sheets.

There are a lot of new “halves” in today’s world.

Amount Delivers Seamless Digital and Mobile Lending Platform to TD Bank (PR Newswire), Rated: A

Amount, a technology provider for financial institutions, today announced a strategic partnership with TD Bank. TD Bank, a top ten U.S. bank, is leveraging Amount’s platform to power the bank’s TD Fit Loan, which launched in August 2018. This initial offering allows consumers to consolidate higher-interest debt, while helping TD meet growing consumer demand for a seamless digital and mobile lending experience. Through this partnership, TD and Amount will roll out additional offerings, as well as standalone tools addressing fraud, verifications and decisioning.

5 Freebies With Your Student Loans (NerdWallet), Rated: A

1. Career coaching

Who offers it: SoFi.

SoFi members have received over 15,000 coaching sessions to date.

4. Referral bonuses

Who offers it: Multiple refinance lenders.

  • Education Loan Finance offers $400 for each successful referral, as well as $100 for the loan applicant.
  • Laurel Road lets you split its $400 bonus however you and your referral see fit.
  • Splash Financial provides $250 apiece for both parties.

5. Charitable work

Who offers it: CommonBond.

If you prefer freebies that help others, CommonBond has a one-for-one social impact mission. For each loan the lender issues, it donates an amount based on a formula that funds a child’s education in a developing country through the nonprofit Pencils of Promise. Those donations have totaled over $1 million to date.

CNote Launches Wisdom Fund to Close Lending Gap for Women (PR Newswire), Rated: A

Women are the fastest-growing group of entrepreneurs in the U.S. Yet less than 5 percent of small business lending—only $1 in $23—goes to women. CNote aims to fix this disparity with the Wisdom Fund, a new impact investment opportunity launching today.

Investors in the Wisdom Fund will earn an estimated 4 percent annual return, over a 60-month term, on a loan portfolio that’s diversified across established CDFIs. Email wisdomfund@mycnote.com to learn how you can help fund more women-owned businesses today.

Women seeking loans should contact a participating CDFI. Partners in the Wisdom Fund’s first phase include:

  • Carolina Small Business Development Fund, which provides small business loans and financial training to startups, existing businesses and community organizations in North Carolina.
  • LiftFund, a Texas-based organization that empowers underserved entrepreneurs with capital and support services in 13 states.
  • TruFund, a national nonprofit organization that provides affordable capital to small businesses and nonprofits in AlabamaLouisiana and New York.

Study Finds 70% of Americans Would Share More Personal Data for Fairer Credit Decisions (PR Newswire), Rated: A

More than half (54%) of loan applicants don’t even have a clear understanding of why they receive the interest rate they do from a lender, while a majority (70%) say it is difficult finding lenders who will look at them as something other than their credit score.

  • 7 in 10 American adults (71%) wish there was another way to prove themselves to credit lenders outside of the standard credit score.
    • Hispanics (82%) and African Americans (81%) are more likely than Whites (67%) to want lenders to look at additional factors in lending decisions.
  • 77% believe more data is better when evaluating potential borrowers’ credit.
  • 71% would be willing to share more personal data with a lender if it resulted in a fairer credit decision. The motivation is even higher among middle-class earners. 79% of people making $50,000 to $75,000 would share more personal data to prove their creditworthiness, compared to 66% of people making over $100,000.
  • 84% think their bank should use modern technology to assess their creditworthiness.
    • Specifically, about half of loan applicants (53%) would like their ideal lender to use machine learning to make fairer credit decisions.
    • More than 2 in 5 (42%) would like their ideal lender to use machine learning to make the credit for homeownership more accessible to everyone.
    • Surprisingly, older generations want newer technology even more. Baby boomers and seniors (83% and 87%, respectively) wanted their banks to use new technologies to score them, compared to 79% for Millennials and Gen Zers.

Survey: Alternative Data Sharing (Urjanet), Rated: B

Urjanet surveyed more than 300 U.S.-based adults to assess consumer sentiment around alternative data sharing in the lending process. Key findings include:

  • A majority of consumers have multiple alternative sources of payment history
  • Alternative data sharing represents a huge opportunity for lenders to drive financial inclusion
  • Most consumers (59%) are willing to share utility and telecom data to boost chances of approval

SigFig launches platform to help retail banks sell financial products (Investment News), Rated: A

SigFig, the financial technology firm that developed digital advice platforms for several large financial institutions, wants to help banks automate more than investment management.

Technology to Play Crucial Role in Preparing ABS Professionals for Next Economic Cycle (ABL Advisor), Rated: A

An overwhelming majority (90 percent) of asset-backed securities (ABS) professionals feel that adopting new technologies will be important to preparing their businesses for the next economic cycle, according to Capital One’s sixth annual survey at SFIG Vegas 2019.

The survey also revealed that ABS professionals believe the biggest risks to their businesses are uncertainty around regulatory risk and increased credit risk, both at 29 percent. However, despite regulatory risk being a top concern, the industry’s apprehension has nearly cut in half over the last two years. In 2018, 48 percent noted regulations were the biggest risk to their businesses while 58 percent thought so in 2017. Additional top-of-mind concerns for 2019 include increases in interest rates (18 percent) and increased competition (17 percent).

TrustToken’s Stablecoin Now Available On Cred’s Crypto Earning Platform (BlockTribune), Rated: A

Asset tokenization platform TrustToken has announced a strategic partnership with crypto lending platform Cred.

Founded by former PayPal financial technology veterans, Cred is a decentralized global lending and borrowing platform that allows stablecoin issuers, exchanges and wallets to provide valuable earn and lending services worldwide.

Fintech in Brief: Update on Legal Challenges to OCC Fintech Charter (JDSupra), Rated: A

On March 19, 2019, the New York State Department of Financial Services (“NYDFS”) filed a brief in opposition to the Office of the Comptroller of the Currency’s (“OCC”) motion to dismiss the NYDFS’ lawsuit challenging the OCC’s statutory authority to grant special purpose national bank charters to Fintechs (the “Fintech Charter”). The brief in opposition signals that the NYDFS will continue its opposition to the Fintech Charter under the leadership of Acting Superintendent Linda Lacewell, who replaced outgoing Superintendent Mari Vullo in February. In opposing the OCC’s motion to dismiss, the NYDFS argued that it has standing to challenge the Fintech Charter, the matter is ripe for judicial review, and its claims are not time-barred. The NYDFS also argued that the OCC’s interpretation of the “business of banking” is not entitled to Chevron deference and “should be invalidated in its entirety.”

Mortech Partners with Roostify for Enhanced Online Mortgage Experience (Business Wire), Rated: A

Today, Mortech, a Zillow Group business providing mortgage technology solutions for mortgage lenders and secondary market teams, announced a new partnership between Mortech’s product and pricing engine (PPE) and Roostify, a digital lending platform that gives customers more control of their home buying process while allowing loan officers to utilize the latest technology to more easily process loans. The strategic partnership will integrate two proven mortgage technology solutions to improve the digital mortgage experience for many industry-leading lenders.

Finastra brings community banking services outside the branch with the launch of Fusion Digital Front Office (Finastra), Rated: A

Finastra has launched Fusion Digital Front Office, an innovative tablet-based banking platform that enables community banks and credit unions to take services directly to the consumer, outside of the branch. The solution provides a simple gateway to manage account origination, sales and service, and transaction processing from any remote location.

Huobi’s US Arm Launches Institutional Group for OTC Crypto Trading (CoinDesk), Rated: A

“We’re entering the market now with a real institutional offering, we’re definitely going to be offering some new products and services,” such as token lending and over-the-counter (OTC) trading, in the coming months, he added.

Elevate Named as a Finalist for LendIt Fintech 2019’s Financial Inclusion Award (AP News), Rated: B

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, has been named as one of six finalists in the “Excellence in Financial Inclusion” category for the LendIt Fintech Industry Awards 2019. This award is given to the company that has made the biggest impact in expanding access to financial services in new and innovative ways.

J.D. Power ranks Regions among top alternative lenders for personal loans (Biz Journals), Rated: B

Birmingham’s largest bank has ranked among the top alternative lenders in the U.S. for providing personal loan satisfaction through digital applications.

United Kingdom

ARBUTHNOT BANKING GROUP (“Arbuthnot”, “the Group” or “ABG”) Audited Final Results for the year to 31 December 2018 (Morningstar), Rated: AAA

FINANCIAL HIGHLIGHTS

·      Profit Before Tax £6.8m (2017: £2.5m)

·      Underlying profit before tax £7.4m (2017: £3.2m)

·      Operating income increased by 24% to £67.9m (2017: £54.6m)

·      Negative earnings per share 134.5p (2017: positive 43.9p)*

·      Continuing earnings per share 38.0p (2017: 14.0p)

·      Underlying earnings per share 40.3p (2017: 17.6p)

·      Final dividend per share 20p (2017: 19p), an increase of 5%

·      Total full year dividend per share 35p (2017: 33p)

·      Bonus share issue to create new class of non-voting shares

·      Net assets £196m (2017: £236m)

·      Net assets per share 1283p (2017: 1547p)

·      Underlying return on deployed equity 5.6% (2017: 4.2%)

Consolidated statement of financial position

 

At 31 December

2018

2017

Note

£000

£000

ASSETS

Cash and balances at central banks

17

405,325

313,101

Loans and advances to banks

18

54,173

70,679

Debt securities at amortised cost / held-to-maturity

19

342,691

227,019

Assets classified as held for sale

20

8,002

2,915

Derivative financial instruments

21

1,846

2,551

Loans and advances to customers

22

1,224,656

1,049,269

Other assets

24

12,716

20,624

Financial investments

25

35,351

2,347

Deferred tax asset

26

1,490

1,527

Interests in associates

27

– 

83,804

Intangible assets

28

16,538

15,995

Property, plant and equipment

30

5,304

3,962

Investment property

31

67,081

59,439

Total assets

2,175,173

1,853,232

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital

37

153

153

Retained earnings

38

209,083

237,171

Other reserves

38

(13,280)

(949)

Total equity

195,956

236,375

LIABILITIES

Deposits from banks

32

232,675

195,097

Derivative financial instruments

21

188

931

Deposits from customers

33

1,714,286

1,390,781

Current tax liability

236

705

Other liabilities

34

18,549

16,239

Debt securities in issue

35

13,283

13,104

Total liabilities

1,979,217

1,616,857

Total equity and liabilities

2,175,173

1,853,232

Read the full report here.

Tech Nation Lists 10 Fintech Pioneers In Future Fifty 2019 Cohort (Forbes), Rated: AAA

Revolut, Monzo, Starling Bank, Currencycloud, Aire, Blockchain, MarketInvoice, Quantexa, Nested and Salary Finance were revealed to be among the 24 most dynamic and fast-growing late-stage technology companies to be chosen to join Future Fifty’s 2019 cohort.

Tech Nation and Dealroom data has also revealed that the U.K. has attracted a whopping $7.9 billion in funding in 2018 and closed the gap for exits of venture-backed companies with the U.S. As well as this U.K. sales, IPOs and mergers were worth $40 billion – ahead of every other European country – which points to the success of the tech sector as a whole in the country.

OAKNORTH ANNOUNCES BRITISH BUSINESS BANK ENABLE GUARANTEE OF £133M (Business Leader), Rated: AAA

OakNorth has today announced its participation in the ENABLE Guarantee programme, securing a guarantee of £133m from the British Business Bank, the UK government’s economic development bank. OakNorth will use the guarantee to strengthen further its lending support to fast-growth businesses and established property developers and investors.

The ENABLE Guarantee programme is designed to encourage banks to increase their lending to smaller businesses by reducing the amount of capital required to be held against such lending. Under an ENABLE Guarantee, the UK Government takes on a portion of the lender’s risk on a portfolio of loans to smaller businesses, in return for a fee.

Inside OakNorth’s plan to take its lending technology global (Tearsheet), Rated: A

As a challenger bank, OakNorth charts a different course. While Revolut, Monzo, and N26 focus on putting their digital current accounts in the hands of millions, OakNorth doesn’t even offer a current account. While other challengers are racing to acquire banking licenses all over the world, OakNorth is happy with just a UK license.

OakNorth is also posting profits while other challengers aren’t.  The bank announced a £33.9m profit for 2018, up 220 percent from 2017.

OakNorth provides debt financing to entrepreneurs in growing businesses, lending £0.5M to £40M to profitable, scale-up, British businesses. To fund its underwriting, OakNorth offers digital savings accounts. It currently has 40,000 customers with digital savings accounts and has lend £3 billion in under four years.

Successful UK Payday Lender Western Circle Limited Begins Offering Personal Loans Online (Finger Lakes Times), Rated: A

Western Circle Limited has made a name for itself by offering responsible payday loans online. Their decision to branch out into the personal loans market through the new brand PersonalLoansNow.co.uk was well received by their customers.

Five last-minute IFISA ideas (P2P Finance News), Rated: A

THE END of the tax year is fast approaching, so if you haven’t yet taken full advantage of your £20,000 ISA allowance to make tax-free returns, now is the time. The peer-to-peer lending industry is expecting to see an uptick in inflows into Innovative Finance ISAs (IFISA) this year now that there is a much wider choice of products available and the potential for higher returns than cash with lower volatility than the stock market.

FINTECH LAUNCHES AI LOAN COMPARISON SERVICE (Business Cloud), Rated: A

Loan marketplace Monevo has launched a new platform to give consumers comparisons of pre-approved loans.

Based in Macclesfield, the business is a licensed credit broker for personal and business loans and is Europe’s largest personal loan marketplace.

An Alternative Approach (IFA Magazine), Rated: A

When it comes to asset allocation, advisers constantly face the challenge of finding real diversification in client portfolios. Sue Whitbread met with Matthew Ardron and Benedict Yung of Basset & Gold Group, to talk about their approach of offering fixed rate bonds that invest in alternative lending.

Half of Brits running out of cash before payday – pushing them to rogue lenders (Mirror), Rated: A

Exclusive research for Mirror Money shows by the end of this month, those turning to payday loans will have shelled out more than £214million – that works out at £28 per second

P2P to have strong presence at Innovate Finance Global Summit (P2P Finance News), Rated: B

FOUNDERS of the ‘big three’ peer-to-peer lenders are among the confirmed speakers at Innovate Finance Global Summit (IFGS), which takes place next month at London’s Guildhall.

Giles Andrews of Zopa, Samir Desai of Funding Circle and Rhydian Lewis of RateSetter are all participating in various sessions at the fintech industry trade body’s flagship conference on 29-30 April 2019, which marks the start of UK Fintech Week.

Other confirmed speakers from the P2P world include Zopa chief executive Jaidev Janardana, ArchOver’s Angus Dent, Ali Celiker from British Pearl and Roxana Mohammadian-Molina from Blend Network.

China/Hong Kong

Hong Kong SME financing platform raises $ 15m for China push (Finextra), Rated: AAA

Hong Kong-based online SME trade financing platform Qupital is targeting the mainland after closing a $15 million Series A funding round led by CreditEase FinTech Investment Fund.

Consumers hunger for loans, lenders popping up everywhere (Shine), Rated: AAA

Qin Shuifeng, 30, who lives in the suburban district of Jiading, went to a branch of the Postal Savings Bank of China in 2016 to seek a loan for home improvements.

The lender granted her and her husband a credit line of 1 million yuan (US$148,600), of which they drew 600,000 yuan, with an interest rate 10 percent higher than the benchmark rate.

Competition 

The central government has issued a series of policies favorable to consumer lending since the second half of 2018.

Still, risks remain. To realize sustainable development, players need to build strong operational and risk control capabilities, either by themselves or in partnership with financial technologies firms.

European Union

Klarna Launches Open Banking Platform (PR Newswire), Rated: AAA

Today, Klarna, one of Europe’s leading payment providers and the global market leader in payment initiation services, announces the launch of its own Open Banking Platform. This platform will enable access to more than 4,300 European banks through a single Access to Account (XS2A) API in line with Payment Services Directive (PSD2). Klarna’s XS2A API is the most established and proven solution that has been developed at scale across markets for almost 15 years through the Klarna Group company Sofort.

This platform provides a fully proven and mature infrastructure, superior market coverage and connectivity, with access to 99% of online banking consumers currently across 14 European markets. By opening up its own advanced technology and capabilities, Klarna is simplifying and democratising access to APIs securely. Both established and newer banks and fintechs as well as other licensed businesses, will be able to build smart and personalised offerings that meet the evolving needs of consumers across Europe. Klarna has been one of the leading proponents of the PSD2 legislation and believes high-quality APIs will drive innovation and competition but most importantly will empower consumers across Europe with increased choice, control and clarity on their finances, and ability to access better products.

International

Has Alternative Lending Seen Its VC Peak? (PYMNTS), Rated: AAA

U.S. FinTech funding reached its highest level in five years in 2018, according to CB Insights data published last month, hitting $11.89 billion. Yet at a time when analysts say VCs are focusing more on late-stage investment, alternative lenders are having a tougher time securing funding, particularly market newcomers in a crowded market.

But there is evidence that investors’ appetite for alternative lending startups is on the wane, even as overall FinTech funding continues to climb — and as the success of the alternative lending market grows, too.

eToro buys blockchain company Firmo (Fintech Futures), Rated: A

Just weeks after launching in the US, trading and investment platform eToro announced plans to purchase Copenhagen-based blockchain firm Firmo, reports Julie Muhn  at Finovate

Founded in 2017, Firmo offers a programming language called FirmoLang that runs on a sidechain. Exchanges can leverage FirmoLang to create financial instruments such as P2P lending platforms or cryptocurrency derivatives with tokens. And Firmo is versatile, allowing the tokens to be run on any blockchain.

Battlestar Capital Earns 30% Returns For Holding Crypto (ChainBits), Rated: B

Battlestar Capital, which is a blockchain staking-as-a-service company, revealed that customers could potentially earn up to 30 percent on a yearly basis when it comes to their idle crypto holdings. Here is everything about the startup’s claims in a nutshell.

In an interview, the company said that it has teamed up with crypto lending startup called Celsius Network in an attempt to launch a large-scale service capable of offering potentially high returns.

Australia

APRA Proposes Stricter Credit Risk Management Standards (Regulation Asia), Rated: AAA

The revised prudential standard enhances board oversight of credit risk and requires more intensive credit checks on borrowers. APRA also highlights the risks of P2P originated loans.

India

New modes of lending, fund raising on cards (The Asian), Rated: AAA

In a bid to change the market dynamics of the banking and financial sectors, the Reserve Bank of India (RBI) will soon come up with alternative models of lending and capital raising for the sectors.

Asia

Bukalapak partners three P2P lenders to provide loans for offline businesses (Tech in Asia), Rated: AAA

Bukalapak is teaming up with Indonesian P2P lending startups Amartha, Modalku, and PohonDana to provide loan facilities in a program called Modal Mitra. The loans are available to offline vendors who are part of the company’s Mitra Bukalapak program.

The financing offered through Modal Mitra ranges between US$70 and US$700 and can be paid back in up to six months, with weekly installments starting from US$6. It can only be used for purchases in the Mitra Bukalapak app.

Eurasia

Russian fintech launches digital bank 131 (Finextra), Rated: AAA

Bank 131, a new digital bank focused on Russian companies and entrepreneurs that work for global internet companies and/or buy from global ecommerce companies with a Russia presence, announced today they have received their banking license from authorities – the first and only new bank to do so in four years.

Canada

Shadow banking has grown, but risks to financial systems are modest (Advisor’s Edge), Rated: AAA

Canada’s shadow banking sector has grown substantially in recent years, but the overall financial system has grown even faster, keeping risks in check, suggests a new report from the Bank of Canada.

In the report, the central bank details the results of its monitoring of so-called “non-bank financial intermediation” (NBFI), also known as shadow banking. Among other things, the report finds the Canadian NBFI sector has grown by 1.7 times since 2006, driven by strong growth in investment funds, securities financing transactions and private lending.

Authors:

George Popescu
Allen Taylor

The post Thursday March 28 2019, Weekly News Digest appeared first on Lending Times.

Thursday January 17 2019, Weekly News Digest

marketplace securitizations

News Comments Today’s main news: RateSetter surpasses 3B GBP in lending. SoFi Money bank-like offerings. LendingClub land on 2019 Bloomberg Gender-Equality Index. HeZhong International to list on Nasdaq. Robo.cash doubles investors in 2018. Kabbage to provide point-of-sale loans to Alibaba shoppers. Today’s main analysis: Marketplace lending securitization slowed in Q4 2018. Today’s thought-provoking articles: Consumer credit continues to grow. Loan default […]

The post Thursday January 17 2019, Weekly News Digest appeared first on Lending Times.

marketplace securitizations

News Comments

United States

United Kingdom

International

Other

News Summary

United States

SoFi Offering Bank Like Services, But it is Still Not a Bank (Crowdfund Insider), Rated: AAA

Today, SoFi is distributing more invites to their bank-like services – SoFi Money, a service announced last summer. SoFi is offering consumers the following:

  • No “freakin” fees, including annual, transactional, overdraft, or any other account fees.
  • Higher interest rates, a “whopping” 2.25% APY on your money.
  • Free ATM usage as SoFi will reimburse the fees.
  • Mobile first as your phone is your [bank] branch.
  • Secure – Accounts are FDIC insured up to $1.5 million.³

More MDs, fewer residents in SoFi’s next student loan securitization (Asset Securitization Report), Rated: A

Social Finance’s next student loan securitization features higher exposure to physicians, and fewer of them are still in a residency program, according to rating agency reports.

Borrowers with medical and dental degrees are considered to be good credits in part because they have some of best employment prospects. They account for 28.8% of borrowers in the pool of collateral who have medical degrees, up from 22% for SoFi’s previous student loan securitization, according to Moody’s Investors Service.

LendingClub Selected for 2019 Bloomberg Gender-Equality Index (LendingClub), Rated: AAA

LendingClub Corporation (NYSE: LC), today announced that it is one of 230 companies selected for the 2019 Bloomberg Gender-Equality Index (GEI), which distinguishes companies committed to transparency in gender reporting and advancing women’s equality. The index doubled in size from 2018 and includes firms from 10 sectors, headquartered across 36 countries and regions. Collectively, these firms have a combined market capitalization of USD 9 trillion and globally employ more than 15 million people, of which 7 million are women. Thirteen markets are represented for the first time this year, including Argentina, China, Israel, and South Africa.

Securitization in Marketplace Lending Slowed in Q4 2018 (Lend Academy), Rated: AAA

Issuance totaled $2.6 billion, which is the slowest pace of issuance in 5 quarters and was related to market volatility according to PeerIQ. Volume decreased 44% from the prior year period and dropped 25% quarter over quarter. Total issuance in 2018 was $15.3 billion and included newer issuers Upgrade and Enova. PeerIQ expects that Upgrade and Enova will continue to participate in the securitization market going forward. While Q4 represented a drop in deals, cumulative issuance still stands at $44.5 billion across 142 deals which is a significant amount.

Source: Bloomberg, PeerIQ

We should also point out that LendingClub sold more than $1 billion in CLUB certficates in 2018 which likely reduced their securitization volume in 2018.

Source: Lend Academy

Fed Affirms Flexibility on Rate Hikes (PeerIQ), Rated: AAA

Consumer credit continues to grow. The Fed reported that consumer credit outstanding grew at an annualized rate of 6.7% in November to $3.98 Tn. This is the third month out of the past four that consumer credit grew more than $20 Bn, for the first time in four years.

Source: Federal Reserve, PeerIQ

Experian: Loan Default Rates Rose In Dec (PYMNTS), Rated: AAA

According to the S&P/Experian Consumer Credit Default Indices, which the companies said in a press release represent a comprehensive measure of changes in consumer credit defaults, the composite rate rose six basis points from December to 0.89 percent. The bank card default rate rose 25 basis points to 3.34 percent, while the auto loan default rate jumped 10 basis points to 1.03 percent. The default rate on first mortgages was three basis points higher at 0.67 percent.

What’s more, S&P Dow Jones Indices and Experian said that all five of the metropolitan statistical areas showed a higher default rate in December of 2018. In Miami, it increased 41 basis points to 1.93 percent, while New York saw a 13 basis-point increase to 0.96 percent and the Chicago default rate was up four basis points to 0.88 percent. In Dallas, the default rate ticked up three basis points to 0.85 percent, while in Los Angeles it was up two basis points to 0.52 percent.

Source: PRNewsfoto/S&P Dow Jones Indices

Fiserv to acquire First Data for $ 22bn (Fintech Futures), Rated: A

A giant will roam the fintech land as Fiserv will acquire First Data in an all-stock transaction of $22 billion.

LendingTree Ranks Most Competitive Housing Markets (LendingTree), Rated: AAA

Key Findings:

Denver, Los Angeles, and Portland, Ore., have the most competitive buyers in the country. Buyers in these areas have higher than average credit and the ability to put down a larger down payment.

Birmingham, Ala., Virginia Beach, Va., and Pittsburgh have the least competitive buyers in the country.Living in a less competitive market can be beneficial for buyers as it means that the path to homeownership is less challenging than it is in other parts of the country. For example, in these three areas, only 43% of mortgage shoppers had prime credit, compared to an average of 49% across the 50 largest metros in the U.S.

Roostify Enables Digital Mortgage Solution for Glacier Bancorp (BusinessWire), Rated: A

Roostify today announced that Glacier Bancorp, Inc. has launched a digital mortgage solution powered by Roostify. Glacier Bancorp, Inc. is a regional bank holding company providing commercial banking services in 104 communities through 164 banking offices in Montana, Idaho, Colorado, Utah, Washington, Wyoming and Arizona. The company holds total assets of $11.9 billion and shareholder equity of $1.5 billion.

Joust launches a digital bank for gig-economy workers (American Banker), Rated: A

The fintech startup Joust is launching a mobile banking app Tuesday designed for the 56.7 million Americans who rely on freelance income.

The product comes with a bank account, a merchant account, and a way to get quick credit. Behind it is a network of community banks that will gather the deposits the app brings in.

Snoop Dogg Invests In Klarna, Sweden’s $ 2.5 Billion Unicorn (Forbes), Rated: A

Klarna, the Swedish financial technology giant valued at $2.5 billion last year, has a new addition to its shareholder register from the most unlikely source.

Millionaire American rapper Snoop Dogg, aka Calvin Broadus, has today become a minority shareholder in the company which offers buy-now-pay-later services at 100,000 retailers in Europe and across the U.S.

2019 business: 5 trends that will dominate 2019 (Business Report), Rated: A

1. Consumers demand data control:  a Deloitte report shows 71% of purchased data is … inaccurate.

2. Alternative lending will surge: It makes sense that non-bank lending will continue to grow, not only was 2018 a big year for the industry but, more importantly, 80% of small business loans are rejected.

6 Personal Loan Lenders That Accept Cosigners (Credible), Rated: A

Not all personal loan lenders allow you to add a cosigner to your physical or online application, but there are some that do. Here are six lenders that allow cosigners on their applications.

  1. Freedom Plus
  2. Laurel Road
  3. Lending Club
  4. Lightstream
  5. OneMain Financial

What happens to robos in a downturn? (Financial Planning), Rated: A

As stocks soared to record highs over the past decade, robo advisors amassed billions of dollars in investable assets. But now with the onset of ominous market indicators and volatility, advisors say they are worried about how automated investment platforms will perform during a major market downturn and what that might mean for their bottom lines.

“It is a wild unknown,” says Josh Pace, president of the custodian TCA by E-Trade.

SMB BANKING: THE NEXT WAVE OF INNOVATION (LendIt), Rated: A

Key findings address:
  • How the largest banks, regional banks and community banks differ in their approaches to blending hi-tech and hi-touch customer interactions
  • Who are emerging SMB-focused fintech companies and partnerships to watch
  • What banking functions and features are most sought after by SMBs
  • How mobile apps are being designed specifically with SMB customers in mind
  • Why big data and artificial intelligence are key to integrated financial dashboard and advisory applications
White Oak Healthcare Finance, LLC (“White Oak”) today announced it acted as sole lender and administrative agent on the funding of a senior credit facility for GMF Capital (“GMF”) and Meridian Senior Living (“Meridian”). The funds were used to acquire assisted living/skilled nursing facilities located near Providence, Rhode Island.

FundThrough Engages 919 Marketing to Fuel U.S. Expansion (PRWeb), Rated: B

FundThrough, North America’s fastest growing automated, tech enabled invoice factoring company and a power player in the fintech SMB (small and midsized businesses) working capital space, has engaged 919 Marketing, a leading national franchise marketing agency offering content marketing and public relations services to all companies (franchise or non-franchise), to generate consistent brand awareness and accelerate expansion in the U.S. markets.

Fed not an impediment to fintechs’ charter ambitions (American Banker), Rated: B

Comptroller of the Currency Joseph Otting on Wednesday downplayed concerns that applicants for the agency’s new fintech charter may face resistance from the Federal Reserve Board.

Some in the fintech industry are raising alarm that the Fed may balk at allowing holders of the new special-purpose charter into the payments system, which could reduce the overall value of the charter.

United Kingdom

RateSetter Milestone: Online Lender Surpasses £3 Billion in Lending (Crowdfund Insider), Rated: AAA

UK based peer-to-peer lender RateSetter announced on Tuesday it has surpassed £3 billion in online lending. RateSetter reported that the milestone follows a successful year, with the lender originating more than £700 million of new lending and active loans under management grew to £820 million.

RateSetter also revealed that more than 600,000 customers have used its lending platform to invest or borrow. To date, investors have lent £1.9 billion to individuals and £1.1 billion to businesses. A total of £2.2 billion has been repaid by borrowers, generating returns of £120 million for RateSetter investors, who have enjoyed an average annual interest rate of 4.4% per year since RateSetter’s launch in 2010.

Rapper Big Narstie named among celebrities joining Zopa hotline for a day (P2P Finance News), Rated: AAA

PEER-TO-PEER lender Zopa is making four celebrities honorary ‘Zopians’ for a day next week.

It has launched a “FeelGood Hotline” to banish the January blues that will be staffed by pop star and TV host Frankie Bridge, broadcaster Lauren Laverne and rapper Big Narstie (pictured) on 23 January.

Boxing icon Frank Bruno will also be on the hotline.

UK challenger bank Tandem eyes IPO (Fintech Futures), Rated: A

UK digital challenger bank Tandem has got its young beating heart set on an IPO within the next few years.

In a brief written and video update, it looks to the future and the past. For example, it cites its recent $15 million investment from Hong Kong for Asian market expansion plans.

Tide Collaborates With ClearBank to Transform UK SME Banking Market (Crowdfund Insider), Rated: B

Tide, a UK-based SME challenger banking, announced on Monday it has formed a new partnership with ClearBank to help transform the UK SME banking market.

Tide reported that through its support, ClearBank has applied for a grant from Pool A of the Capability and Innovation Fund that forms part of the £775 million RBS Alternative Remedies Package, a government-backed competition. 

A quarter of UK consumers will have a neobank account within five years (Business Insider), Rated: A

Currently, 9% of Brits, equating to 4.5 million people, have opened an account with a digital-only bank, according to the study. By 2024, a further 16% of the population, or 8.5 million people, intend to do the same.

Source: Business Insider

ARBUTHNOT COMMERCIAL ASSET BASED LENDING LTD. SUPPORTS MBO OF PLUMBWORLD WITH £3.5M STOCK ONLY FACILITY (Arbuthnot Latham), Rated: A

Arbuthnot Commercial Asset Based Lending Ltd. (Arbuthnot Commercial ABL) is pleased to announce the completion of a bespoke £3.5m transaction to support the management buy-out of Online Home Retail Limited (trading as www.plumbworld.co.uk), one of the UK’s leading e-commerce retailer of bathroom related products, from Grafton Group PLC, an international distributor of building materials.

BBVA name dropped in Atom Bank takeover talks (Fintech Futures), Rated: B

BBVA is one of the names coming up in a potential takeover of the UK digital challenger Atom Bank.

Sky News has learnt that Atom is in talks to appoint Citi to advise its board on options for the business.

Accountants Look Out (Fintech Finance), Rated: B

Two thirds (66%) of accountants surveyed said that they do recommend external finance providers to their clients. Whilst these recommendations will be based on the need of any given business, they also indicated their preferred source of funding. Half (50.8%) indicated that they would recommend their clients speak with a bank about their finance needs. Interestingly, more than a third (36.3%) are recommending an invoice finance provider ahead of a business loan provider (33.66%).

China

HeZhong International, Chinese P2P Lender, Seeks $ 5.8 Million Nasdaq Listing (Capital Watch), Rated: AAA

The Shenzhen company hopes to raise up to $5.8 million in New York under the symbol “HZ,” according to its prospectus filed with the U.S. Securities and Exchange Commission.

On its online platform, HeZhong matches borrowers and investors, facilitating mostly consumer loans ranging from $437 to $2,200. It also issues car loans in the amounts ranging between $2,900 and $29,200.

HeZhong IPO: Tempting But Risky With 3,330% Revenue Growth (Seeking Alpha), Rated: A

  • Based in Shenzhen, China, HeZhong offers an online peer-to-peer lending marketplace, providing consumer and automobile loans to the Chinese borrowers and risk-adjusted returns to the investors.
  • Certain investors will believe that the interest rates seem quite appealing. Annual interest rates are between 8% and 15%, and usual tenures are from 7 days to 360 days.
  • The year 2018 was also great in terms of profitability. The company went from reporting losses from operations of -$1.1 million to report operating profit of $5.6 million.
European Union

Robo.cash doubles new investors in 2018 (P2P Finance News), Rated: AAA

LATVIAN peer-to-peer lending platform Robo.cash has reported that it doubled its investor base in 2018 as it expanded its product range and scaled up its lending.

The P2P payday lender said the total volume of investments on its platform hit €5m (£4.45m) after a strong year, representing 93 per cent growth. Meanwhile, it attracted 3,200 new investors, twice the number in 2017, with the majority coming from Germany.

Investment in European Companies Remains Steady but Deal Flow Dives (Crowdfund Insider), Rated: A

Dow Jones has published their Q4 VentureSource report today and while investment in European companies “held steady” deal flow dropped.

The report indicates that the number of deals in Q4 stood at 729. In comparison to the prior quarter, it dipped slightly from 738. When you compare year over year quarters the discrepancy is greater as Q4 2017 delivered 865 separate deals.

In total amount raised, Q4 2018 came in at € 5.19 billion. This is a decline from Q3 at €4.98 billion. But year over year the amount was down as well as Q4 2017 saw € 5.6 billion raised.

Better systems can aid business of giving money to tackle poverty (Breaking News), Rated: A

On a visit to Ethiopia last week, the Taoiseach chose to visit one of the most impoverished areas of the world and witness, first hand, profound poverty.

While there, he was introduced to a woman who had bought four potentially life-saving sheep with a micro-loan provided by Irish Aid.

Irish Aid is operated by the Department of Foreign Affairs. It is, effectively, managed on behalf of us citizens.

International

Kabbage to provide point-of-sale loans to Alibaba shoppers (American Banker), Rated: AAA

Kabbage, an online lender to small businesses, is now providing point-of-sale loans to small businesses that buy things on Alibaba’s online shopping site, the two companies announced Monday.

Under the program, which is called Pay Later, small-business owners can get credit lines of up to $150,000 for their orders on the site.

White Oak Global Advisors Surpasses $ 2.5 Billion of Loan Originations (AP News), Rated: A

White Oak Global Advisors, LLC (“White Oak”), today announced it funded over $2.5 billion in loans in 2018.

Klarna links up with Daniel Wellington to allow shoppers to slice their purchase and pay over time (Klarna), Rated: B

Today, global payments provider, Klarna announced a new collaboration with Daniel Wellington, maker of classic and timeless watches. Loyal shoppers of Daniel Wellington will now benefit from Klarna’s newest payment option, which allows customers to pay for their watches and accessories in 4 equal interest-free installments collected bi-weekly from the shopper’s chosen debit or credit card.

India

Blockchain, AI providing traction to India’s crowdfunding platforms (Financial Express), Rated: AAA

Although crowdfunding in India is at a nascent stage, with only 15 notable crowdfunding platforms (CFPs), the concept holds immense potential for the country’s startup ecosystem.

A World Bank report states crowdfunding has emerged as a multi-billion dollar global industry, and is expected have a volume of $300 billion by 2030.

Authors:

George Popescu
Allen Taylor

The post Thursday January 17 2019, Weekly News Digest appeared first on Lending Times.

Thursday December 13 2018, Daily News Digest

unsecured personal loan balances

News Comments Today’s main news: FDIC opens comments on Special Purpose National Bank charters. Plaid raises $250M. P2PFA member lending exceeds 10B GBP. ThinCats raise 200M GBP. Bondora originates almost 8M euro in loans in November. Klarna joins Shopify Plus Partner Program. Nubank launches debit card. Today’s main analysis: Trends in credit card debt. Today’s thought-provoking articles: Consumer credit market poised […]

unsecured personal loan balances

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

FDIC Embraces FinTech (PeerIQ), Rated: AAA

Formation of new banks post-crisis is historically low. More banks have failed since 2009 than have new banks opened.This trend could leave some communities severely underbanked.

The FDIC wants to encourage new banks to startup and wants innovative FinTech firms to be part of that process. The agency wants to streamline its application process and is seeking comments on how that can be done.

The OCC’s Special Purpose National Bank (SPNB) charter allows FinTechs to operate as banks.

Fintech startup Plaid raises $ 250M at a $ 2.65B valuation (TechCrunch), Rated: AAA

The company is today announcing a $250 million Series C investment led by famed venture capitalist and the author of the Internet Trends reportMary Meeker, who will join its board of directors as part of the deal. The funds were raised at a valuation of $2.65 billion, according to sources close to the company. Capital from Meeker’s investment came from Kleiner Perkins’ growth fund — where Meeker has been a partner since 2010 — not from the reported billion-dollar-plus solo fund she’s in the process of raising.

New investors Andreessen Horowitz, Index Ventures, Norwest Venture Partners and Coatue Management also participated, as did existing investors Goldman Sachs, NEA and Spark Capital.

U.S. Consumer Credit Market Poised for More Growth in 2019 (TransUnion), Rated: AAA

Low unemployment rates and continued positive growth in both GDP and real disposable income are among the key drivers that will propel the U.S. consumer credit market in 2019. Partly due to the strong performance of these economic indicators, TransUnion’s (NYSE: TRU) 2019 consumer credit forecast found that originations and consumer balances are expected to increase for most credit products, while serious delinquency rates will likely decline or remain steady.

Source: Globe News Wire

A few outliers in the forecast come by way of serious credit card delinquency rates and originations as well as mortgage originations. Credit card delinquency rates are expected to rise from 1.94% in Q4 2018 to 2.04% in Q4 2019 as a shift toward more non-prime consumers with access to credit cards will likely negatively impact originations and consequently the serious delinquency rate.

Source: Globe News Wire

TransUnion Forecast: Top Consumer Credit Trends for ‘19

Trend #1: There’s Room for Growth in Personal Loans

Personal loans continue to display signs of strength, and total balances are expected to climb 20% to an all-time high of 156.3 billion by the end of 2019.

Trend #2: Affordability May Impact the Auto Industry

It’s also worth noting that the number of auto loan originations is expected to end 2018 at 28.5 million and grow to 29.4 million in 2019. This is a significant increase from recent years (27.5 million in 2017, 28.3 million in 2016, 28.0 million in 2015). This growth is expected to be driven from both ends of the risk spectrum. Yet as the growth continues, the serious delinquency rate is anticipated to remain muted, ticking up to 1.44% in Q4 2019, an increase from the expected 1.43% in Q4 2018 and the 1.43% mark observed in Q4 2017.

Trend #3: Homes Becoming More Expensive, but Home Equity Increases Could Be a Boon to Consumers

Mortgage originations have declined the past several quarters, a trend that is expected to continue into 2019.  Rising interest rates, increasing home prices, and supply constraints are driving lower origination numbers.  Average balances will continue to trend upward in 2019, growing from an anticipated $208,831 at the end of Q4 of this year to $218,490 by the end of Q4 2019, a 4.6% increase.

Trend #4: More Near Prime Consumers will Carry a Credit Card

Near prime consumers are expected to increase their origination share to 19.1% in 2019, up from 18.3% in 2018.

Credit Card Debt Study: Trends & Insights (Wallet Hub), Rated: AAA

Americans repaid $40.8 billion in credit card debt during Q1 2018 – the second-largest quarterly payoff ever. But we added almost $38 billion back to our tab in Q3 and Q2 2018. We also began the year owing more than $1 trillion in credit card debt for the first time ever, after adding $87.3 billion to our tab in 2017.

Source: WalletHub

The $38 billion in credit card debt added during Q2 and Q3 2018 has nearly wiped out consumers’ large first quarter pay-down.

We ended 2017 with $87.3 billion in new credit card debt, and WalletHub projects a $70 billion increase in 2018 by the end of the year.

Source: WalletHub

Americans started 2018 with more than $1 trillion in outstanding credit card balances for the first time ever, and we are on pace to begin 2019 in even worse shape.

Cities with the Highest & Lowest Credit Card Debts

Percentile* City Median Credit Card Debt Cost to Pay off Months & Days Until Payoff
99 Colleyville, TX $5,593 $880 24 months and 28 days
99 Darien, CT $7,935 $1,167 23 months and 8 days
99 Park City, UT $5,376 $720 21 months and 5 days
99 Fairbanks, AK $4,655 $620 21 months and 2 days
99 Summit, NJ $4,953 $655 20 months and 29 days
99 Leawood, KS $4,857 $642 20 months and 29 days
99 The Woodlands, TX $5,088 $670 20 months and 27 days
99 Mill Valley, CA $5,110 $672 20 months and 26 days
99 Needham, MA $4,393 $577 20 months and 25 days
99 Sammamish, WA $4,386 $575 20 months and 24 days
99 Durango, CO $3,583 $466 20 months and 17 days
99 Lafayette, CO $3,600 $467 20 months and 16 days
99 Juneau, AK $4,166 $540 20 months and 16 days
99 Southlake, TX $5,988 $775 20 months and 14 days
99 Ridgewood, NJ $5,625 $727 20 months and 14 days
99 Hoboken, NJ $3,570 $456 20 months and 6 days
99 Westport, CT $6,112 $770 19 months and 30 days
99 Winchester, MA $4,618 $580 19 months and 28 days
99 Highland Park, IL $5,379 $672 19 months and 24 days
99 Bethesda, MD $4,599 $573 19 months and 22 days
99 Wasilla, AK $4,693 $584 19 months and 22 days
99 Monument, CO $4,157 $514 19 months and 17 days
99 Newton, MA $4,014 $494 19 months and 15 days
99 Lafayette, CA $5,028 $618 19 months and 13 days
99 Scarsdale, NY $5,231 $641 19 months and 11 days
99 Bloomfield Hills, MI $4,552 $557 19 months and 11 days
99 Deerfield, IL $4,698 $575 19 months and 10 days
99 Woodinville, WA $4,331 $528 19 months and 8 days
99 Brookhaven, GA $4,221 $513 19 months and 6 days
99 Hingham, MA $4,571 $554 19 months and 4 days
*99th Percentile = Least Sustainable Credit Card Debt

A Different Kind of Gender Gap: Homeownership Is More Common Among Single Women Than Single Men (LendingTree), Rated: AAA

  • Single women own considerably more homes than single men do. On average, single women own around 22% of homes, while single men own less than 13% of homes.
  • Oklahoma City was the metropolitan area where single men own the largest share of owner-occupied homes, at 16%. Even though single men own a greater proportion of homes in Oklahoma City than they do elsewhere in the country, they still own fewer homes than single women, who own 24% of residential properties in the area.
  • New Orleans was the metropolitan area where single women own the largest share of owner-occupied homes. In this area, single women own nearly twice as many homes than single men do: 27% compared with 15%.

OCC sees sharp drop in mortgages serviced by large banks (American Banker), Rated: A

The OCC’s quarterly metrics report, released Tuesday, showed continued improvements in credit quality of mortgage loans at banks. But it also noted that the report is based on $3.26 trillion in principal balances, representing 32% of all mortgages in the U.S. Ten years ago, that figure was $6.1 trillion in mortgage balances, representing 60% of all outstanding mortgages.

How Do Underwriters View Mortgage Lending? (Progress in Lending), Rated: A

Subprime personal loans will flourish in 2019 thanks to startups and Donald Trump (Quartz), Rated: AAA

Subprime personal loan balances have been climbing since 2014 and are forecast to increase 20% next year, to a record $156.3 billion, according to credit-scoring firm TransUnion. The last three months of this year will be the biggest quarter ever for origination, accounting for some 5 million loans.

San Francisco-based Affirm, founded by PayPal co-founder Max Levchin, is one of the leaders in point-of-sale loans and is available at more than 1,200 US retailers. The company says its lending process allows it to approve far more applicants across the credit spectrum than traditional lenders.

Payday lending has also increased. These days, this type of high-interest, short-term debt often takes place online through installment loans. San Francisco-based LendUp is an example of the new breed of payday lenders, charging annual percentage rates that can range from 30% to more than 1,300% depending on the type of loan, according to a report by NerdWallet.

Galaxy Digital Leads $ 30 Million Funding for Social-Crypto Startup Good Money (CoinDesk), Rated: A

Digital banking platform Good Money just raised $30 million in a Series A funding round to continue developing its app.

Led by Michael Novogratz’s Galaxy Digital (via its Galaxy EOS VC Fund), participants in the funding round included Breyer Capital, Blocktower Capital, Boost VC, Ken Howery, BlockChange Ventures, Cross Culture Capital, Troy Carter, Mitch Kapor, Peter Diamandis Blake Mycoskie and Justin Rosenstein, among others.

Half of Americans think using sharing services is risky (Biz Journals), Rated: A

Personal safety is a real concern Americans have about the sharing economy, according to a new survey commissioned by insurance company Lloyd’s.

The sharing economy includes companies that use data and develop platforms to connect people, including ride-sharing services like Uber and Lyft, apartment and home lending sites like Airbnb and VRBO, as well as peer-to-peer lending, reselling, co-working, and freelancing sites, per Forbes.

The analysis showed that 60 percent of American consumers believe they are putting their personal safety at risk by using sharing services because it means interacting with strangers, and 58 percent think that the risks outweigh the benefits.

Investors’ Harbour Launches New Fund That Will Finance the Development of Hawaii’s Newest Master-Planned Community (Investors’ Harbour), Rated: B

Admiral Realty Capital’s new private placement, Fund V, is engaged in providing financing to Puainako Heights Land Investment, the master-developer of a subdivision on the Big Island with over 330 single-family homesites. The offering is featured on the Boston-based crowdfunding platform Investors’ Harbour.

Different than most existing crowdfunding platforms, Investors’ Harbour does not feature an avalanche of small “fix-and-flip” projects handled by real estate enthusiasts. With a very low acceptance rate, Harbour only hosts larger-scale construction programs, conducted by commercial development firms with admirable track record.

Dharma-based Crypto Lending Platform Bloqboard Launches New Feature to Empower Lenders (Crypto Coin Spy), Rated: B

Bloqboard – a non-custodial digital asset lending platform for collateralized loans originated, settled, serviced, and managed on the Ethereum network and powered by Dharma and Compound – has today announced the release of a new feature they call ‘Offers to Lend’. This provides lenders with the ability to offer prospective borrowers their cryptoassets for peer-to-peer loans issued on the Dharma protocol.

Wyre partners with bZx, the protocol that powers decentralized margin lending (Cryptoninjas), Rated: B

Blockchain enabled payments company Wyre today announced a partnership with bZx, the protocol that powers decentralized margin lending. bZx will incorporate Wyre’s KYC/AML solution for DEXs to offer compliant trading.

United Kingdom

P2PFA member lending exceeds £10bn (P2P Finance News), Rated: AAA

PEER-TO-PEER Finance Association (P2PFA) platforms have cumulatively lent out more than £10bn, according to the trade body’s latest data.

Peer-to-peer platform ThinCats secures £200m funding deal (AltFi), Rated: AAA

The money comes from BAE Systems Pensions and is the second significant loan funding deal struck by ThinCats in the last few months.

Iwoca adds Barclays and HSBC to Open Banking connections (Finextra), Rated: A

iwoca, the UK’s fastest growing small business lender, today announces it has connected to Barclays and HSBC banks under Open Banking.

Tide accounts for 1 per cent of UK’s SME banking market (AltFi), Rated: A

Digital business bank Tide has reached 56,000 SME customers, accounting for one per cent the UK’s 5.6m SMEs. The bank has more than doubled the number of customers using its services in the last 12 months.

UK recruiters say challenger banks and fintech businesses are now more appealing to candidates than traditional banks (Onrec), Rated: A

  • 55% of recruiters and HR managers have seen an increase in hiring rates over the last five years
  • Half of UK recruiters and HR managers have seen an increase in demand for AI, cryptocurrency and blockchain skills
  • 55% say the number of roles requiring these emerging tech skills has outstripped the number of available candidates
  • 32% of recruiters say traditional banks are the least appealing FS organisations to candidates, whilst cryptocurrency businesses are top

Sancus tightens credit processes amid no-deal Brexit fears (P2P Finance News), Rated: A

SANCUS BMS has prepared itself for a no-deal Brexit and tightened its credit processes to protect itself from a market slowdown, its chief executive has said.

Sancus BMS, which comprises the peer-to-peer lenders Sancus Finance and Sancus Funding, sent out an email to its community on Wednesday.

Starling Bank Adds Onedox to Its Marketplace (coverageR), Rated: B

Founded in 2015 with £1m in funding, Onedox helps people manage household bills and expenses by allowing them to connect their different accounts including gas, electric, internet, mobile, and insurance. The service – which is free of charge – allows users to stay on top of their bills while receiving personalized recommendations for saving money by switching to new providers.

China

China Lending Expands B2B Offerings With Supply Chain Service (PYMNTS), Rated: AAA

China Lending Corporation has announced the launch of its new supply chain financing services, which include a business factoring program.

In addition, China Lending has acquired 98.04 percent equity interest in Hangzhou Zeshi Investment Partners, which will enable China Lending to launch its new supply chain financing services in the near future, including financing products design, related corporate financing solutions, investments and asset management, and more.

Best/Worst Bets In Chinese Fintech (Seeking Alpha), Rated: A

China’s financial technology, or fintech, sector, has suffered this year due to a slowing economy and stricter financial regulation. In the peer to peer lending sector, hundreds of firms have shut down due to inability to comply with regulations or insolvency. So, what can we expect from this industry in the near future?

European Union

P2P Lender Bondora Reports Almost €8 Million in Originations for November (Crowdfund Insider), Rated: AAA

Peer to peer lending platform Bondora says loan originations almost hit €8 million during the month of November. This follows a record-breaking month of October

In November, Bondora issued €7,894,070 of new loans, just ahead of the record set for originations in the previous month of €7,802,163.

LendIt Fintech Europe 2018 Slide Presentations Now Live (LendIt.com), Rated: A

Thanks to everyone who joined us at LendIt Fintech Europe 2018. Below you will find all of the presentations from the event. You can also view the photos from LendIt Fintech Europe 2018.

Keynotes

  • Joel Perlman, OakNorth Holdings – The OakNorth Growth Story – from Startup to Profitable Unicorn
  • June Ou, Figure – Blockchain: Creating the Future of Financial Services
  • John Goodall, Landbay – Misconceptions of the UK Buy-to-Let Market Today

Get the full schedule here.

Spotcap increases credit lines to EUR 300M (Spotcap email), Rated: A

It’s been a busy and rewarding 12 months for us here at 

YouHodler – Top Crypto Lending Platform on the Market (NewsBTC), Rated: A

YouHodler is a crypto-backed loan service provider. This established blockchain platform allows users to acquire loans instantly, by leveraging their cryptocurrencies for EUR or USD.

The company offers the highest loan-to-value ratio in the entire industry – up to 80%. And, unlike its competitors, it accepts five of the top cryptocurrencies as collateral, including Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Ripple. Short-term loans are available at a low interest rate of just 2.5%.

Alternative finance ‘becoming vital’ for SMEs in north (The Irish News), Rated: A

THE ability for small businesses in Northern Ireland to access alternative forms of finance has become a vital factor in their successful growth, the head of a Belfast accountancy firm insists.

Since the financial crash and credit crunch, the funding void left by traditional lenders has been filled by boutique funders and alternative finance, which can allow SMEs to access finance for a variety of different needs, from long term investment through to funding for short term working capital.

International

Klarna Joins Shopify Plus Partner Program To Power High-Growth Merchants (PR Newswire), Rated: AAA

Klarna announced today that they are among the first payment service providers to join the Shopify Plus Technology Partner Program, focusing on high-growth and high-volume merchants. This integration will allow merchants in Germany, the UK and the US to easily implement Klarna’s smoooth payment suite and offer a superior customer experience and thereby unlock additional growth potential.

Cred Opens Crypto Corporate Lending Platform To Developers (PYMNTS), Rated: A

In a press release on Tuesday (Dec. 11), Cred revealed the rollout of its developer platform CredX (not to be confused with the new credit card accounts payable solution recently launched by Finexio). The Crypto-Lending-as-a-Service (CLaaS) solution enables other crypto companies — including exchanges, crypto wallets or mining services — to integrate Cred’s lending functionality into their own solutions. Its set of application program interfaces (APIs) enable businesses to use crypto as collateral to access corporate financing products.

Australia

Payday loan applicants asked to hand over bank passwords, inquiry hears (The Guardian), Rated: AAA

A new parliamentary inquiry has begun scrutinising the behaviour of payday lenders, buy-now-pay-later firms, and credit repair agencies.

Vulnerable Australians are agreeing to share their internet banking passwords so payday lenders can see their transaction history before lending them money, an inquiry has heard.

Asia

400 Online Lending Sites, Fintech Platforms Being Shut Down (Tempo.co), Rated: AAA

Communication and Informatics (Kominfo) Minister Rudiantara said the ministry had shut down 400 financial technologies (fintech), consisted of sites and applications, related to fraud cases on online loan services that are recently rampant in Indonesia.

LBH Urged to Expose Identities of Violating Online Loan Services (Tempo.co), Rated: B

The Indonesian Fintech Joint Funding Association (AFPI) asked the Jakarta Legal Aid Institute (LBH) to open the identities of 25 peer to peer (P2P) lending organizers or registered online loan services that are said to have made violation.

South Korea is getting its first fintech unicorn (Business Insider), Rated: A

South Korean fintech Toss has raised an $80 million funding round led by US-based firms Kleiner Perkins and Ribbit Capital, with participation from Altos Ventures, Bessemer Venture Partners, PayPal, and Qualcomm Ventures, among others. This brings Toss’ valuation to $1.2 billion, making it the latest fintech unicorn globally, and Korea’s first.

Toss started out offering peer-to-peer (P2P) payments, but has since added other services —including insurance, investments, savings accounts, credit score management, and a financial dashboard that allows users to see all of their finances in one place — by partnering with third parties. Toss already has 10 million registered users, meaning it reaches around 20% of Korea’s population with its services.

Source: Business Insider

How these Amazon and Xiaomi alums are helping the unbanked with blockchain (Tech in Asia), Rated: A

“A lot of the traditional models are not applicable to onboard those people into financial systems,” says Sarah Zhang, co-founder of Singapore-based Points.

That’s where Points – also called PTS – picks up the slack. Founded last year, the blockchain-powered startup uses AI and big data to assess factors like an individual’s occupation, bill payments, and shopping activities to calculate a credit score.

Latin America

Brazilian Fintech Nubank Launches Debit Card To Reach 120M Clients (Forbes), Rated: AAA

Brazilian fintech Nubank has launched a debit function for its card offering as well as the ability to withdraw cash from ATMs, in a move that aims to extend its reach to as many as 120 million customers.

The startup created in 2013 and valued at over $4 billion 

Africa

Experian to acquire African credit info firm Compuscan for $ 263m (Fintech Futures), Rated: AAA

Experian is buying African credit information and analytics services firm Compuscan for ZAR 3.72 billion ($263 million) from markets investor Actis.

Authors:

George Popescu
Allen Taylor

Tuesday October 30 2018, Daily News Digest

Synchrony Q3 Earnings

News Comments Today’s main news: SoFi caught with alleged misleading ads. The Motley Fool recommends LendingClub. Prosper performance update. Australia’s fintechs are beginning to make profits. Elevate Credit plunges from record low. Today’s main analysis: Loan growth at credit card issuers. Today’s thought-provoking articles: Down payment affordability by state. Crypto lending and the turbulent 2018 market. Do banks or fintechs do […]

Synchrony Q3 Earnings

News Comments

United States

United Kingdom

International

Other

News Summary

United States

FTC puts student lenders on notice by citing misleading ads at SoFi (American Banker) Rated: AAA

SoFi has agreed to settle federal charges that it misled borrowers about how much they could save by refinancing their student loans. The charges were issued by the Federal Trade Commission, which warned other student lenders to steer clear of similar violations.

The commission voted 5-0 on Monday to issue the administrative complaint and accept the agreement with SoFi. The company, which agreed to stop exaggerating potential savings, was not required to pay a civil penalty.

According to the FTC, SoFi over the past two years has inflated — at times doubling — estimates of the average borrower’s savings from student loan refis. The San Francisco company, which in one ad claimed that SoFi customers save an average of $22,359, did so, in part, by excluding from its calculations borrowers who refinance their loans with longer terms and pay more over the lifetime of their loans, the agency said.

Online Student Loan Refinance Company SoFi Settles FTC Charges, Agrees to Stop Making False Claims About Loan Refinancing Savings (FTC) Rated: A

Online student loan refinancer SoFi has agreed to stop misrepresenting how much money student loan borrowers have saved or will save from refinancing their loans with the company, in order to settle Federal Trade Commission charges that it deceptively advertised inflated figures for more than two years.

According to the FTC, one online SoFi ad claimed, “Refinancing student loans saves $22,359 on average,” while another ad told readers to “Start saving on your student loans. Average monthly savings $292.”

6 Great Stocks Under $ 6 (The Motley Fool) Rated: AAA

LendingClub — $3.13

Peer-to-peer lending doesn’t get a lot of love on Wall Street, but it’s a win-win for folks looking to borrow money and risk-tolerant income investors willing to lend out their money in the chase for higher yields. LendingClub has had a rough first few years as a public company, and it wasn’t until just a few weeks ago that it settled up on Federal Trade Commission and SEC complaints stemming from company disclosures that ultimately cost its CEO his job.

The platform’s popularity continues to grow. Revenue rose 27% in LendingClub’s latest quarter, and loan originations rose 31% to hit a record $2.8 billion. Guidance wasn’t great. Profitability remains a challenge. The depressed stock has some serious upside as demand for peer-to-peer lending gains — pun intended — interest.

Prosper Performance Update: September 2018 (Prosper Blog) Rated: AAA

Highlights from the September report include:

  • In September, 61% of originations were rated AA-B as Prosper continues to reduce the risk profile of originations on the platform.
  • Dollar WA FICO for the month of September was 717, remaining flat month-over-month and increasing 10 points since Q3 2017.
  • Average loan size on the platform is approximately $13,300, approximately $280 lower since 2018H1. This decrease is driven by our continued focus on limiting loan amounts based on a borrower’s income and ability to pay.
  • WA Borrower Rate for September originations on the platform increased by 10 bps compared to August as the portion of originations rated AA-B decreased slightly.

Loan Growth at Credit Card Issuers (Peer IQ) Rated: AAA

American Express Q3 Earnings

Revenues at AXP grew by 9% YoY to $10.1 Bn to achieve record levels. Earnings grew by 22% YoY to $1.7 Bn. NII also grew 17% YoY to $2 Bn. AXP’s premium customer base saw record-low delinquency rates while the net charge-off rate increased slightly YoY to 1.7%.

Source: Peer IQ

Capital One Q3 Earnings

COF’s revenues were flat YoY at $7 Bn, but earnings grew by 36% YoY to $1.5 Bn. Growth in NII was modest at 2% YoY to $5.8 Bn. COF was the only issuer who saw a drop in the net charge-off rate by 20 bps YoY to 2.4%. COF also saw its provisions for loan losses decrease by 31% YoY driven by improving credit quality of the credit card and auto loan portfolios. This release in provisions consequently led to a 3% YoY drop in allowance for loan losses to $7.2 Bn on loan growth of 1% YoY.

Source: PeerIQ

Synchrony Q3 Earnings

SYF’s revenues grew by 9% YoY to $3.3 Bn. Earnings grew by 21% YoY to $0.7 Bn. NII grew by 9% YoY to $4.2 Bn. SYF had the highest net charge-off rate of 5% among all issuers, which stayed flat YoY. Loans grew by 14% YoY to $88 Bn. Provision for loan losses grew by 11% YoY and the total allowance for loan losses increased by 16% YoY to $2.9 Bn, slightly outpacing loan growth.

Source: PeerIQ

LendingTree Ranks Down Payment Affordability by State (Lending Tree) Rated: AAA

Key findings

  • Average down payment percentages for conventional 30-year, fixed-rate purchase mortgage offers stayed about the same from the second quarter to the third quarter, rising 0.03 percentage points (18.02% to 18.05%).
  • At the same time, average down payment amounts decreased nearly 10% in the third quarter, falling from $52,480 to $47,265.
  • The average loan amount offered to potential homebuyers fell around $28,000 from $285,903 in Q2 to $257,749 in Q3.
Source: Lending Tree

 

Source: Lending Tree

Average mortgage down payments drop in Q3 (Mortage Professional America) Rated: A

Average down payment amounts for conventional 30-year, fixed-rate purchase mortgage offers declined during the third quarter, while down payments as a percentage of the price stayed about the same, according to an analysis by LendingTree.

Average amounts fell by almost 10% during the third quarter, decreasing to $47,265 from $52,480. At the same time, average down payment percentages were steady from the second quarter, rising 0.03 percentage points to 18.05% from 18.02%.

The Credit Junction Secures $ 23 Million Equity Investment from Century Equity Partners (New York Business Journal) Rated: A

The Credit Junction, the first data-driven, asset-based lender for small and mid-sized businesses, has secured a $23 million growth equity investment from Century Equity Partners (“Century”). Century focuses on making investments in lower middle market companies that have demonstrated value propositions to the financial services industry. This investment provides The Credit Junction with growth capital to expand its ability to provide financing solutions to Supply Chain America, as well as commercialize its proprietary data and risk analytics platform.

This marks the second meaningful financing announcement for The Credit Junction in recent months, as the company secured a $150 million credit facility from MidCap Financial in March 2018.

Surge in Mobile Fraud and Phishing, Balancing Customer Friction and Fraud Prevention Are Biggest Challenges for Businesses (PR Newswire) Rated: A

IDology today released its Sixth Annual Fraud Report, confirming the growing importance of balancing customer friction and fraud prevention, cited by businesses this year as the number one challenge in fighting fraud. The report reveals a surge in mobile and phishing fraud schemes, a focus on artificial intelligence and machine learning as the growing trends in identity verification, and the strategic role identity verification plays in the quest to gain a competitive edge, retain and attract customers, and increase revenue.

Phishing and Mobile Fraud Surge

Credit card fraud and account takeovers remain the most widespread forms of fraud, but phishing schemes and mobile fraud have surged.

  • The prevalence of mobile fraud surged dramatically with an increase of 117% over the previous year (one of the highest year-over-year increases among the fraud vectors measured this year in the survey). The number of businesses that feel their industry is least prepared to detect and prevent mobile device attacks increased 167% compared to a year ago.
  • Businesses reported a 63% increase in mobile fraud. All types, including porting, spoofing, hacking and fraudulent change events, are on the rise. Caller ID spoofing increased by 74%, porting by 69% and SMS interception by 50% compared to 2017.
  • Phishing, which can be linked to 93% of last year’s security breaches and has steadily risen each year, increased in prevalence by 66%.
Source: IDology

ABS Professionals Demonstrate Enthusiasm Despite Rising Interest Rates, Survey Finds (ABL Advisor) Rated: A

Capital One survey conducted at ABS East 2018—a conference convening professionals from across the asset-backed securities (ABS) industry—found that most respondents (94 percent) expect buy-side interest in ABS to increase or remain the same in the coming year while only 6 percent expect it to decrease.

Of the challenges facing the industry, only 15 percent of ABS professionals elected increases in interest rates. For the majority of respondents, uncertainty around regulatory requirements (30 percent), increased credit risk (25 percent) and increased competition (24 percent) pose the greater challenges for their businesses over the next 12 months.

State Regulators File Second Lawsuit Opposing OCC Fintech Charter (National Law Review) Rated: A

The Conference of State Bank Supervisors (CSBS) has filed a second lawsuit in D.C. federal district court to stop the Office of the Comptroller of the Currency (OCC) from issuing special purpose national bank (SPNB) charters to fintech companies.  A similar lawsuit was filed last month in a New York federal district court by the New York Department of Financial Services.

Stephanie Klein of Braviant Holdings (Lend Academy) Rated: A

While the non-prime consumer lending space is less competitive than prime there are many companies doing interesting things. We heard the recent news of US Bank entering the space and just today I read that the CFPB intends to change the rules for payday lenders in the new year. It is certainly a dynamic space that will be going through lots of changes in the near future.

Our next guest on the Lend Academy Podcast is Stephanie Klein. She is the CEO of Braviant Holdings, a non-prime lender that has been around since 2014. Stephanie actually has quite a long history in the non-prime space going back more than a decade to her time with Al Goldstein’s (the CEO of Avant) first lending company, CashNetUSA.

Online subprime lender Elevate Credit plunges from record low after earnings (Market Watch) Rated: AAA

Elevate Credit Inc. ELVT, -32.13% closed at a record low Monday, then plunged more than 20% in after-hours trading following an earnings report that included lowered annual guidance and myriad concerns that cropped up in the quarter. Chief Executive Ken Rees called the quarter “unexpectedly challenging” in the announcement, and then ticked off the reasons for the performance.

Elevate, which offers loans online to subprime customers through different products, reported a third-quarter loss of $4.2 million, or 10 cents a share, on revenue of $201.5 million, after reporting a profit of a penny a share on sales of $172.9 million a year ago. Analysts on average expected earnings of 13 cents a share on sales of $200.2 million, according to FactSet.

The company chopped its annual forecast, which previously called for earnings of 55 cents to 90 cents a share on sales of $790 million to $810 million. Now, Elevate expects earnings of 23 cents to 32 cents a share on sales of $790 million to $795 million in 2018. After shares closed at an all-time low of $6.35 Monday, they fell to about $5 in after-hours trading.

Equifax launches real-time Open Banking ID checks (Peer2Peer Finance) Rated: A

CREDIT referencing agency Equifax has teamed up with Open Banking technology provider consents.online to allow it to match customer data and transactions in real time.

It will be used within Equifax’s bank account verifier system that lets lenders compare sort codes and account numbers to its own database.

Users will be able to match identity information such as the consumer’s name, address and date of birth with transaction data provided through Open Banking, helping them verify who someone is faster and help avoid fraud.

5 Ways Online Loan Lenders are Changing the Financial Landscape (The Libertarian Republic) Rated: A

Perhaps you didn’t know that about 80 percent of American households are in some form of financial debt.

  1. Fast Access to Credit

Traditional banks have a bad reputation for playing hardball with loan applicants. Borrowers have to fill out more than a couple of forms and wait for days, weeks even, to get an approval. Never mind a simpler clerical error can get your request turned down.

  1. Credit Process Automation

One of the reasons traditional lenders take ages to approve and disburse credit is that they have to manually verify borrowers’ details.

  1. Introduction of New Lending Models

You don’t just walk into any bank or credit union and apply for a loan.

  1. Bad Credit? No Problem

The only other thing that is certain besides death and taxes is a traditional lender turning down a borrower with poor credit.

  1. Millennials Are Having Their Way

Being a millennial is a full-time job – with no paid overtime. From having people label them needy and entitled to being the objects of hate for older generations, it’s tough being a millennial.

Money20/20 Las Vegas: Wealthfront’s Freemium Tool Shows How Robo-Advisors Can Capture Market Share from Incumbents (The Fintech Times) Rated: A

At Money 20/20 in Las Vegas, Wealthfront announced it is opening up its financial planning service to anyone for free. The freemium service is currently in beta and will be available by the end of this year.

Heike van den Hoevel, Senior Wealth Management Analyst at 

The U.S. Financial Industry Could Be More Innovative. But Should It? (Barrons) Rated: A

American banking is apparently just a bit too boring, the Federal Deposit Insurance Corp. has concluded. Its chairwoman, Jelena McWilliams, told the American Bankers Association conference that the agency will open an innovation office.

This is related to, but slightly different from, the tack taken in July’s report from the Treasury Department that laid out more than 80 recommendations to help nonbank financial firms. The idea then was that nonbank financial firms, which get called fintechs for marketing reasons, don’t get a fair shot because of the regulatory advantages enjoyed by regular old banks.

The message was that regulation was stifling innovation by not regulating nonbank financial firms. Companies like Square, for instance, should be able to get banking charters if they want. (Which they do.)

McWilliams seems to see the problem from the perspective of banks rather than from nonbanks and comes to what looks like a contradictory position: Nonbank fintechs are innovating like crazy and banks aren’t keeping up. But there’s nothing exactly contradictory about saying nonbanks could be doing more things under a more accommodating regulatory regime and that banks aren’t innovating as fast nonbanks.

Walker & Dunlop Selects SS&C to Support $ 78 Billion Loan Portfolio (SS&C) Rated: B

SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), a global provider of financial services software and software-enabled services, today announced that Walker & Dunlop has selected SS&C as a technology and services partner to deliver a highly-automated solution for loan servicing, asset management, insurance compliance, document management and investor reporting. This partnership reinforces SS&C’s commitment to the agency/multifamily market.

SS&C will provide cloud-based software and outsourcing services including Precision LM for loan servicing, and AWD, an enterprise business process management system, which combines automation, workforce optimization and digital transformation for insurance compliance and renewals. SS&C’s integrated solution supports a broad range of commercial/multifamily loan programs, such as Freddie Mac (including Freddie K securitizations), Fannie Mae, HUD, Bridge, Life Company and more.

Commerce Bank Supports FinTech Startups through Partnership with SixThirty (Business Wire) Rated: B

Commerce Bank announced today a multi-year partnership with SixThirty, a St. Louis-based venture fund that invests in financial technology (FinTech) startup companies. SixThirty targets investments in late-seed stage startups that have a product and market traction and are starting to earn revenue. Its portfolio and pipeline represent some of the most innovative and promising FinTech ideas from around the world.

Through its strategic relationship with SixThirty, Commerce will provide hands-on training and mentoring to the companies selected to take part in SixThirty’s business development program. Commerce team members will also participate in networking opportunities with leading technology and financial services institutions and some of the brightest and most innovative minds in the country. Additionally, Commerce will have the ability to make direct investments in ideas that present strategic, long-term opportunity to the business and the needs of our customers.

The Schall Law Firm Announces the Filing of a Class Action Lawsuit Against Jianpu Technology Inc. (Business Wire) Rated: B

The Schall Law Firm, a national shareholder rights litigation firm, announces the filing of a class action lawsuit against Jianpu Technology Inc. (“Jianpu” or “the Company”) (NYSE: JT) for violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission.

Investors who purchased the Company’s shares pursuant to and/or traceable to the Registration Statement and Prospectus issued in connection with Jianpu’s initial public offering on or about November 16, 2017, are encouraged to contact the firm before December 24, 2018.

United Kingdom

The House Crowd opens £15m property development project to investors (Development Finance) Rated: AAA

A£15m crowdfunding property development project in Altrincham from the House Crowd has opened for investment.
The property crowdfunding and P2P lending platform is scheduled to complete the land purchase in November and start the build in January.

The House Crowd gives retail investors the chance to make an investment – starting from £1,000 – in property developments and builds the properties itself.

The site is in Altrincham town centre and will result in a total of 40 units comprising 31 apartments, eight townhouses and one commercial unit (pictured above).

P2P sector queries data used to justify tabled investor restrictions (Peer2Peer Finance) Rated: A

The industry gathered at a Peer-to-Peer Finance Association (P2PFA) event held in London last Wednesday, to discuss the Financial Conduct Authority’s (FCA’s) review of the sector ahead of the 27 October deadline for feedback.

The most contentious element of the FCA review was its proposals to introduce categorisation and appropriateness tests for P2P investors. Under the proposed changes, platforms would be restricted to marketing to those who are certified as sophisticated or high-net-worth investors or those that certify that they will not invest more than 10 per cent of their net portfolio in P2P.

At the P2PFA event, which was held under Chatham House rules, stakeholders suggested that the FCA had misinterpreted the findings of a 2016 survey conducted by the Cambridge Centre for Alternative Finance, which collected responses from investors. It was suggested that the FCA had used these findings as justification for the proposed marketing restrictions.

nCino to Present at Upcoming Fintech Industry Conferences (PR Newswire) Rated: B

nCino, the worldwide leader in cloud banking, today announced that members of the company’s leadership and market development teams will speak at two upcoming fintech industry conferences.

Nathaniel Ward, nCino’s regional vice president of market development for EMEA, will be speaking at MoneyLive Nordic Banking 2018 in a session titled: New Models in Banking: The Impact of Digitalisation. This session will explore the benefits and opportunities of cloud banking, and how to enable a workforce through digital transformation. This session will take place on 8 November at 09.45 at the Copenhagen Marriot Hotel.

Later in November, nCino’s chief innovation officer, Nathan Snell, will participate in a fireside chat at LendIt FinTech Europe 2018. In a session titled: The Rapid Pace of Product Launches in the Digital Age, Snell will discuss AI’s potential impact on the future of banking.

International

Crypto Lending Platforms Navigate Turbulent 2018 Market (Forbes) Rated: AAA

The surge of cryptocurrencies and “hodling” investment strategies of 2017 precipitated a flood of crypto asset-backed lending platforms coming to market.

The idea is a simple – take the concepts and models of traditional asset-backed lending and implement them with new “crypto assets” like Bitcoin and Ether. So if cryptocurrency miners or hodlers need short term access to fiat currency to pay expenses but don’t want to liquidate their positions, they can take out loans against the value of their crypto assets.

As such, platforms like ETHLend, SALT Lending, Nuo Lend and a plethora of others provide an alternative vehicle for investors who want to simultaneously hold and use their cryptocurrency.

Nexo Shares Positive Testimonials From XRP Users One Week After Launching Lending Service (Blokt) Rated: A

Nexo writes that it has received a huge inflow of corporate as well as individual XRP users who sought Nexo loans by keeping their crypto holdings as collateral. The loans ranged between $1,000 to $2,000,000. The service provider goes on to suggest that it is humbled as well as thrilled by the recognition it has received from the XRP community. The firm went on to share some testimonials by clients.

Australia

Australia’s fintech startups are starting to make profits (Business Insider) Rated: AAA

Australian fintech revenues are up 2.25 times and more of the startups have hit profitability as the local sector matures, according to the latest EY Census released at the FinTech Australia Intersekt conference.

Almost one in five (19%) fintech companies are now profitable with those aged three years or older now making up 43% of the local industry, up from 31% last year and just 20% in 2016.

The 2018 EY FinTech Australia Census, now in its third year, paints a picture of a sector now established and coming into its own as an alternative within the financial services landscape.

Forget flower crowns, personal loans are the latest wedding trend, says RateSetter (Mozo) Rated: A

From eco friendly decor to cupcake tiers, there’s always a new wedding trend on the rise. But according to recent research by peer-to-peer lender (P2P), RateSetter, low rate personal loans are also becoming many couples’ wedding essential.

A big reason loved up couples are opting for personal loans to help pay for their big day is to minimise credit card debt – 40% of RateSetter customers admitted to have taken out a personal loan to avoid using their plastic.

Contrary to the popular belief that men are not as involved in wedding planning, the data revealed that men were 66% more likely to take out a personal loan, compared to women (34%).

India

Banks or FinTechs – Who Does a Better Job for Business Loans? (Entrepreneur) Rated: AAA

Budding entrepreneurs with revolutionary business ideas (usually) need financing to keep their operations running. Banks have encouraged the growth of small-scale industries with access to credit, but the supply cannot keep up with the demand. Enter: Financial technology companies, aka FinTechs.

The global FinTech industry is maturing rapidly – with over $41.7bn invested in just the first half of 2018. Part of those deals was for FinTech lenders, who have supported the trend of industrialisation by granting business financing to those who were denied from traditional banks.

Asia

In brief: P2P lender PeopleFund raises $ 11m from Kakao, 500 Startups, more (Tech In Asia) Rated: AAA

PeopleFund, Korea’s fast-growing financial technology platform that connects borrowers and investors, has secured US$11M in series B funding.

The funding was led by KakaoPay, a subsidiary of Kakao that allows payments within Korea’s popular chatting app, KakaoTalk.

Returning investors included Dayli Financial Group, 500 Startups, and D3 Jubilee.

Authors:

George Popescu
Allen Taylor