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 […]

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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 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.