Wednesday June 27 2018 Daily News Digest

Bank of Amazon unbundling financial services

News Comments Today’s main news: Consumer debt surpasses mortgage debt. Funding Circle, INTRUST Bank expand partnership. Revolut offers app store for business banking. VPC Specialty Lending hits record monthly returns. Today’s main analysis: Amazon’s big push into lending, and beyond. Today’s thought-provoking articles: The past and future of banking. Should income investors consider P2P lending? Banks can’t partner themselves into […]

Bank of Amazon unbundling financial services

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United States

United Kingdom

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News Summary

United States

Consumer Debt Now Surpasses Mortgage Debt (Investopedia) Rated: AAA

Mortgages may represent the largest debt for households, but as a percentage of disposable income, home loans are comprising less of a liability, LendingTree found.

In a research report, the online lender, which analyzed data from the Federal Reserve, said that mortgage-related household debt has declined 5.5%, while consumer credit, which includes revolving credit and installment loans, jumped 45%. Of that, 42% was student loan debt. What’s more, LendingTree found that American household debt is on track to hit $1 trillion above the 2008 peak by the end of June. The debt figure has been increasing at a 3.4% annual rate and includes mortgage debt.

By the end of the second quarter, LendingTree is forecasting total mortgage and consumer debt to reach $15.7 trillion compared with $14.7 trillion 10 years ago.

INTRUST Bank and Funding Circle expand partnership (PR Newswire) Rated: AAA

Funding Circle, the small business loans platform, and INTRUST Bank, a leading US regional bank headquartered in Kansas, today announced the next phase of their strategic partnership to support the growth of US small businesses. Following the successful launch of this partnership earlier this year, the second phase increases INTRUST’s funding commitment and kicks off a targeted, co-branded marketing campaign, giving business owners across KansasMissouriOklahoma, and Arkansas greater access to fast and flexible financing.

To date, over 150 American small businesses have received loans backed by INTRUST through the Funding Circle platform. The upsized commitment is anticipated to increase this number above 500.

Amazon and Their Push Into Fintech (Lend Academy) Rated: AAA

Last week CB Insights released this really interesting report titled, Everything You Need To Know About What Amazon Is Doing in Financial Services.

Source: Lend Academy

The report provides an in depth look at the moves Amazon has made in payments, lending, the new Amazon Cash program and also takes a look at how the company has been developing fintech programs internationally.

By the simple addition of a debit card, Amazon could move the unbanked into a quasi bank account that could be used at places beyond Amazon.

They have had a small business lending operation since 2011 and much fanfare was made about the $3 billion they have loaned through June 2017. But that doesn’t even put them in the top three online small business lenders in that time period. OnDeck, Kabbage and CAN Capital all loaned more.

To be fair Amazon is not trying to be a general purpose lender. Their SMB lending operation is targeted solely at Amazon marketplace sellers as a way to help them grow their business so they will sell more products on Amazon. It is not clear they have a desire to do more than that.

Source: CB Insights

The Banking Industry: Past and Future (The Motley Fool) Rated: AAA

INDUSTRY FOCUS // Financials // 06-25-2018

One of the big things that’s happened over the past 25 years is that the big banks have gotten bigger. We now have what are known as the Big Four banks in the U.S. — CitigroupBank of AmericaWells Fargo and JPMorgan Chase. All of those have grown substantially through acquisitions, not just from the financial crisis, which saw a lot of consolidation, but beforehand. Actually, three of the four were actually acquired themselves, and the acquiring companies just decided to keep the names because they were more recognizable.

Douglass: I believe that peer-to-peer lending will represent at least 25% of total lending spent in 25 years. Now, I only say 25%. For me, it’s very clear that peer-to-peer lending has become a lot more widespread and a lot more feasible than it was previously. I do expect the peer-to-peer lenders — or a bank, perhaps, who hops in — to help solve for one of the current difficulties, which essentially is poor underwriting by some of the peer-to-peer facilitators right now, meaning that the investors who are putting the money in aren’t making the kind of money that they’d hoped to — I believe those will ultimately be solved.

But, I only say 25% because banks have legitimately trillions of dollars to lend, and they will absolutely be looking for ways to deploy that capital effectively. So, I would expect that they will be helping facilitate a lot of these peer-to-peer loans. I believe they will be, in some cases, investing alongside. I think they will often invest in alone, and perhaps then sell it to peer-to-peer lenders for an arbitrage so that they can do it all again, sort of like you see with agency-backed mortgages.

Marcus Is Not Adding Credit Cards Products … Yet (Bank Innovation) Rated: A

Marcus, the consumer lending arm for Goldman Sachs, wants to become the one-stop shop for many of your financial matters, except for one: credit cards — at least for now. Right now, Marcus is heavily focused on launching a savings platform in the U.K. in the coming months, Talwar said. 

The challenges for a new ‘bank’ with a famous parent (American Banker) Rated: A

When JPMorgan Chase set out to make its digital-only brand Finn, it quickly rejected the idea of using it to lure millennial customers over to the institutional side of the bank.

Finn has also found that for the 27 states where JPMorgan Chase is part of a shared ATM network but has no ATMs or branches of its own, customers have difficulty depositing cash. While those same customers can still withdraw cash and often don’t carry money with them, customers that work for tips have a hard time keeping Finn as their main banking account.

Sharestates Launches New Loan Programs  (PR Newswire) Rated: A

Sharestates announced the launch of a Long-Term Portfolio Loan Program to facilitate the needs of borrowers throughout the life cycle of their real estate projects.

Some highlights of the Long-Term Portfolio Loan Program include 30 and 40-year mortgage terms, interest rates ranging from 5.99 to 7.5%, loans with a 10-year interest only period, followed by 20 or 30 years of amortization, as well as the ability to cover three or more properties under a single loan.

Venmo officially launches its own MasterCard-branded debit card (TechCrunch) Rated: A

Venmo today is officially introducing its own debit card in partnership with MasterCard, following beta tests of a Visa-branded debit card last year. The new card will allow Venmo users to pay anywhere MasterCard is accepted in the U.S., and will record transactions to the user’s Venmo account for easy splitting with friends. It can also be used at an ATM to withdraw funds from the Venmo’s account’s balance.

Unlike the beta version of the card, the MasterCard-branded Venmo card can be used to withdraw up to $400 per day at ATMs displaying the MasterCard, Cirrus, PULSE, or MoneyPass acceptance marks. No fees apply for U.S. MoneyPass ATMs, while the others will charge a $2.50 ATM domestic withdrawal fee.

There are no fees for using the card for purchases, even if you get cash back at the point of sale. However, if a signature is required to get cash back at a bank, you’ll pay a $3.00 Over the Counter Domestic Withdrawal Fee, the company says.

PayPal gets anti-fraud ability with $ 120m acquisition of Simility (Fintech Futures) Rated: A

Following on from its $400 million purchase of Hyperwallet on 20 June, it has now acquired fraud prevention and risk management platform Simility for $120 million.

Following the close of the deal, merchants on the PayPal platform will gain access to fraud tools that can be customised through their existing account management dashboard.

Crowd lending fintech raises more than $ 17M (American Banker) Rated: A

The crowd lending startup P2Binvestor has secured more than $17 million in funding from more than 20 participants to expand its bank partnership program, the company announced Thursday.

CrowdOut Capital Surpasses $ 100 Million in Loans to Middle Market Companies to Fuel Growth (Business Wire) Rated: A

CrowdOut Capital, the first tech-enabled online marketplace to fund corporate loans for middle market companies, announced it funded more than $112 million in loans in less than two years. Accredited investors choose from the company’s vetted loan offerings on a deal-by-deal basis.

CrowdOut funds loans as small as $3 million to companies with annual revenues between $10 – $500 million to fuel growth.

James Gutierrez of Insikt (Lend Academy) Rated: A

My next guest on the Lend Academy Podcast has spent his career doing just that. James Gutierrez is the CEO and Founder of Insikt. Since I last had James on the show a lot has changed but their mission is still to improve the financial health of the underserved consumer.

Banks can’t partner themselves into digital relevancy (American Banker) Rated: AAA

For banks, these partnerships won’t generate the quantum leap they need to move beyond a decades-old, product-centric mentality to deliver next-generation financial services that consumers deserve. At best, financial institutions may gain a workable solution that squats awkwardly in the existing infrastructure and brand. At worst, after a lot of time and effort — and increasing their infrastructure costs — banks will fail to deliver any noticeable difference to customers beyond a flurry of press releases.

StraightUp Announces Merger With Slice (PR Newswire) Rated: A

StraightUp, an innovative real estate-focused platform giving investors access to previously unavailable development opportunities, announced today a merger with Slice, the first blockchain-based REIT for investors around the world.

StraightUp was designed to democratize access to previously unattainable high-potential investment opportunities in New York City. As a result of merging with Slice, the new and improved platform will give international investors access to premium equity opportunities in desirable cities across the country, including New York CityLos Angeles and San Francisco.

Mobile app for underbanked looks to go national (American Banker) Rated: A

You could easily mistake Anne Leland Clark, a Twin Cities nonprofit executive, for a banker with with big, national ambitions as she discusses her organization’s digital platform for the underbanked.

The product, known as Fair Financial, launched in a pilot program this week to serve about 500 local customers over the next 18 months.

Majority of Americans Won’t Use a Credit Card to Pay for This Summer’s Vacation (Herald Courier) Rated: A

The survey of over 1,000 U.S. respondents, conducted by Affirm, found that Americans typically take their biggest vacations of the year over the summer, and cost is a major factor when planning travel.

55 percent of Americans said it’s very important to have the cost of the vacation paid off before going. The cost of a trip can linger even after the vacation is over: 32 percent of people said they regretted taking a vacation altogether.

House passes bill allowing telecom, utility payments in credit scores (American Banker) Rated: B

The legislation, authored by Rep. Keith Ellison, D-Minn., is aimed at helping consumers, those in particularly lower-income and minority households, build their credit histories.

Under the bill, information about a consumer’s utility or telecommunications service may be reported only to the extent that the information relates to payment by the consumer for such service.

Depositing the Future (NullTX) Rated: A

What differentiates Depository Network from both of those companies/platforms is the fact that Depository Network is actually not a lending platform. Rather, it is a depository infrastructure that other P2P lending platforms, banks and credit institutions can utilize. Depository Network is the world’s first fully decentralized multi-platform collateral network that connects traditional lending and blockchain technology.

Invoice Factoring Edges Out Competition Among Short-Term Borrowing Options (PR Newswire) Rated: A

When a business needs to raise capital, the more short-term the borrowing options, the better. For every option, though, business owners must weigh the increased cash flow against the trade-off. Interstate Capital looked at a breakdown of options – from bank loans to savings – invoice factoring comes out on top.

AFR Announces Expanded Technology Offering (AFR Wholesale) Rated: B

American Financial Resources, Inc. (AFR) announces that it has completed a pilot and will now be providing its broker network with notification when a house for which AFR owns the servicing is listed for sale. This will enable AFR’s broker partners an opportunity to reconnect with the homeowner and, ideally, assist with their next mortgage, on both the relisted property as well as the borrower’s next home.

Wells Fargo revamps premium card to compete on rewards (Payments Source) Rated: B

Two years after JPMorgan Chase & Co. launched an arms race in credit-card rewards with its Sapphire Reserve card, Wells Fargo will now offer three points per dollar spent on dining, travel and streaming services such as Netflix on its Propel card. Other purchases will earn one point per dollar, and points are redeemable at one cent per point.

United Kingdom

Revolut Now Offers an App Store for Business Banking (Crowdfund Insider) Rated: AAA

Revolut, a digital only bank that says it is signing up over 120 businesses per day, has launched a new services for their business customers – Revolut Connect. This new feature is described as an “App store” for businesses to help provide easier access to digital tools.

With more than 60,000 businesses uses their bank now,  Revolut Connect is designed to help firms easily connect and build integrations for the most popular business apps, including accounting platforms like FreeAgent, communication tools like Slack, Apps to help with tax, payroll, expense management and more. Revolut adds that many more popular Apps are in the queue. Revolut wants to create a one stop mobile experience where businesses may manage all of their financial needs in a single mobile friendly application.

VPC Specialty Lending sees record monthly returns (AltFi News) Rated: AAA

The £289m VPC Specialty Lending investment trust has recorded its highest monthly return to date for May 2018, according to stock market filings.

Its net asset value [NAV] total return for the month of May, the latest numbers released by VPC, was 1.03 per cent for the month. Returns comprised 0.94 per cent of income gains and 0.09 per cent of capital gains.

Should Income Investors Consider P2P Lending? (Morningstar) Rated: AAA

Peer-to-peer investment trusts now have around £1 billion of assets under management between them, but the jury is still out on whether or not they are worth backing.

P2P trusts launched four years ago as direct peer-to-peer lenders including Zopa and Funding Circle were fast gaining traction. The trusts promised exposure to hundreds, or even thousands, of different peer-to-peer loans, in return for a juicy dividend yield.

Majority of brokers’ biggest frustration is lenders changing their mind on a deal (Mortgage Introducer) Rated: A

Over half (56%) of brokers said the lenders changing their mind on a deal frustrates them the most about the specialist finance market, LendInvest found from surveying brokers at the NACFB Commercial Finance Expo in Birmingham.

A quarter (24%) identified the lack of good service as their main frustration. Rates not being good enough was an issue for 14% of those surveyed, while only 6% of those surveyed cited lack of choice as their biggest frustration.

Acceptance of robo advice on the rise (Financial Reporter) Rated: A

According to a recent poll carried out at the Intelliflo Change the Game conferences held in Manchester and London, robo-advice is now regarded as less of a threat to business for advisers than it has been in recent years.

Last year, both options gained equal top share in the poll (37% each of 315 respondents), while this year,’ robo-advice’ dropped to 25.5% (419 respondents), with ‘large product providers going direct’ down slightly but still the top concern at 32.5%.

A guide to liquid IFISAs (Peer2Peer Finance) Rated: A

But the rising popularity of the secondary market and ‘instant access’ accounts have created enhanced liquidity for P2P investors. On an array of platforms, lenders can sign up for long-term loans before selling their stake to others, while some of the bigger platforms allow free or low-fee withdrawals.

We’ve put together a guide to all the platforms offering IFISAs with extra liquidity…

  • Ablrate
  • Abundance
  • Assetz Capital
  • CapitalRise
  • Crowd2Fund
  • Folk2Folk
  • Funding Circle
  • FundingSecure
  • HNW Lending
  • JustUs
  • Landbay
  • LandlordInvest
  • LendingCrowd
  • Lending Works
China

Chinese online lending platform Hui Ying Financial lowers US IPO deal size to $ 32 million (Nasdaq) Rated: AAA

Hui Ying Financial Holdings, which operates an online peer-to-peer lending platform in China, lowered the proposed deal size for its upcoming IPO on Tuesday.

The Shanghai, China-based company now plans to raise $32 million by offering 5.6 million shares at a price of $5.85. The company had previously filed to offer 6.8 million shares at the same price. Hui Ying Financial Holdings will raise -19% less in proceeds than previously anticipated and command a market value of $436 million. Shares are currently listed on the OTCQB under the symbol SFHD.

European Union

Raisin and Banco BNI Europa Deepen Collaboration (Crowdfund Insider) Rated: AAA

Fintechs Banco BNI Europa and Raisin have furthered the collaboration between the two firms. Banco BNI Europe says it has entered into a cooperation to allow Portuguese savers to gain access to the best savings rates available from across Europe.

International

Global Debt Registry Launches Decentralized Ledger for the Loan Market  (Payment Week), Rated: A

Global Debt Registry (“GDR”)today announced the launch of its loan registry designed to verify and provide transparency on loan data on the cloud-based IBM Blockchain Platform. All loan level collateral positions and verification activity will now be immutably recorded on the decentralized registry with highly secure permissioning and access controls to provide new levels of efficiency to the $400bn asset backed securities (ABS) market.

Mobilum Crypto Payment Processor Partners With EthicHub Crowdlending Platform (Bitcoin Exchange) Rated: B

Mobilum is a cryptocurrency enabled payment processing platform which allows for cryptocurrency payments in real time at points of sale via an already existing debit or credit cards of the customer and the issuer of the Mobilum token. Mobilum recently announced its partnership with EthicHub, an affiliation that is expected to bolster a mutual sharing of investment opportunities for users on both platforms.

EthicHub’s crowd lending projects have provided financial solutions for small projects especially those involving farmers in less economically disadvantaged parts of the world, an accomplishment for which it was awarded the Best financial inclusion project at LaBitConf in Bogota as well as the award of the “Start-up with the Greatest social impact” at Unconference Fintech Awards in Madrid, Spain.

Australia

Mortgage Choice partners with P2P lender (The Adviser) Rated: AAA

Mortgage Choice has announced that it has partnered with RateSetter in a move that would provide its 600 brokers with access to personal loans and green loans offered by the P2P lender.

RateSetter CEO Daniel Foggo claimed that the partnership was part of the lender’s plan to develop its broker relationships.

ING distribution boss joins RateSetter (Independent Financial Adviser) Rated: B

ING’s former head of third-party distribution, who led relationships with financial advice and mortgage broking networks, has left to join fintech peer-to-peer lender RateSetter.

India

All Financial Transactions on Faircent Conducted through Escrow Account (BW CI World) Rated: AAA

Faircent.com was the first platform in India to meet all guidelines prescribed by RBI and receive the NBFC-P2P certification in May, this year. This is a validation of the business model that we have painstakingly built over the last five years.

All financial transactions on our platform are undertaken through an escrow account under the trusteeship of ITSL (an IDBI Trusteeship Services Ltd). Borrowers are evaluated by our fully-automated credit evaluation mechanism across more than 400 data points to understand their ability, stability and intent to repay before they are listed on the platform.

Canada

Finastra to sell Canadian-based Collateral Management Corporation business to Teranet (Finastra) Rated: AAA

Finastra today announced that it has entered a definitive agreement to sell its Canadian-based Collateral Management Corporation (CMS) business to Teranet. The transaction is expected to close in July 2018, subject to required regulatory approvals and customary closing conditions.

CMS will join Teranet as a new complementary line of business. Jointly, they will deliver enhanced, integrated solutions to a broad set of financial services customers, leveraging investments in technology, rich insightful data, and market leading electronic registry and workflow platforms.

Authors:

George Popescu
Allen Taylor

Friday March 9 2018, Daily News Digest

Friday March 9 2018, Daily News Digest

News Comments Today’s main news: What SoFi pays for prime customer acquisition. Funding Circle investors lent over 113M GBP in February. Landbay hit 100M GBP lending milestone. Atom Bank secures 149M GBP, BBVA ups stakes. Today’s main analysis: LendingTree personal loan offers report – February 2018. Americans owe more than $1T in credit card debt. Today’s thought-provoking articles: Americans […]

Friday March 9 2018, Daily News Digest

News Comments

United States

United Kingdom

European Union

International

India

Africa

News Summary

United States

SoFi Is Paying Top Dollar To Acquire Its Prime Customers (Fast Company), Rated: AAA

Last year, even as a sex scandal engulfed the six-year-old company, SoFi originated $12.9 billion in loans, added 225,000 customers, and turned a profit.

All told, SoFi spent $170 million on marketing in 2017, or $756 to acquire each new customer, according to data obtained by Fast Company and confirmed by the company. This year, SoFi plans to spend $200 million.

Other online lenders targeting prime borrowers, like Lending Club and Prosper, typically spend $350-$450 to acquire each customer, industry experts say.

Judge ‘Shocked’ By $ 16M Atty Fee Bid In LendingClub Deal, (Law 360), Rated: A

A California federal judge said he was “shocked” attorneys want $16 million for representing LendingClub Corp. investors in two securities class actions against the peer-to-peer lending company, telling the plaintiffs’ lawyers at a hearing Thursday they “may be being greedy” by asking for that much of the $125 million settlement.

LendingTree Personal Loan Offers Report – February 2018 (LendingTree), Rated: AAA

Excellent credit (760+ score): Offered APRs to consumers with a credit score of 760+ averaged 7.44% in February.

  • The average best APR offered to all borrowers with credit scores of 760 or above was 7.44%, an increase of 3 basis points from the prior month, but down 19 basis points from the same period one year ago.
  • At $23,689, the average loan amounts offered with the best APRs to all borrowers with a score of 760 and above was down 2.23% ($528) from January, but up over 21.44% ($5,078) 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 4.97% on average, and loan amounts of $33,050. A borrower with this APR and loan amount would save $2,748 by consolidating debt with a 10% APR over a three-year term.
Source: LendingTree

Good credit (680 – 719 score): Offered APRs to consumers with a credit score between 680 and 719 averaged 15.69% in February.

  • The average best APR for all borrowers with credit scores of 680 – 719 was 15.69%, down 10 basis points from last month, but up almost 126 basis points from a year earlier.
  • At $16,272, borrowers with scores of 680 – 719 saw the amounts offered with the best APRs increase by almost 4% ($644) in the last month and by almost 5% ($795) from February 2017.
  • The top 10% of offers, presented to borrowers with the best profiles within the 680 – 719 credit score range, had an average best APR of 6.75%, offered with an average loan amount of $24,484. A borrower with this APR and loan amount would save $3,440 by consolidating debt from a 15% APR over a three-year term.
Source: LendingTree

Credit Card Debt Study: Trends & Insights (WalletHub), Rated: AAA

Americans now owe more than $1 trillion in credit card debt for the first time ever, after adding a post-Great Recession record $92.2 billion to our tab in 2017. Only four times in the past 30 years have we spent so much in a year. And in each of those prior cases, the charge-off rate – currently hovering near historical lows – rose the following year.

Source: WalletHub

The $67.6 billion in credit card debt that we added in Q4 2017 is the highest quarterly accumulation in the last 30 years – 68% higher than the post-Great Recession average.

Source: WalletHub
Source: WalletHub

 

 

Fintechs on Bank of Amazon: It’d be a net plus (American Banker), Rated: A

When Chris Britt, founder and CEO of the challenger bank Chime, heard that 

Brett King — founder of Moven, which is on its way to becoming a U.S. challenger bank — had a similar reaction.

“I’m frankly surprised it took them this long, given Alibaba’s massive success with Yue Bao,” he said, referring to the money market fund the online retailer formed that now has more than 370 million investors.

Kathryn Petralia, co-founder and president of the small-business lending fintech Kabbage, also liked the idea of Amazon offering checking with a large bank partner.

“It made perfect sense to me,” she said. “It seems like Amazon is doing this to enhance the customer experience, and they have a really strong focus on customer experience and customer service.”

Kabbage already competes with Amazon for small-business loans. Amazon began making loans of $1,000 to $750,000 in 2011. Last June, the company said it had issued more than $1 billion in loans during the previous 12 months and $1.5 billion in loans in the four years prior. Kabbage has made $4 billion in loans since it started in 2009.

Small-bank contract negotiators expand from core systems to fintech (American Banker), Rated: B

The consulting firm Paladin fs announced on Tuesday that Alex Lopatine, who founded the cloud-based core systems provider Nymbus, will be the managing director of its new “FinTech Advantage,” a unit dedicated to helping banks buy financial technology “needed to remain competitive and successful in the fast-evolving industry,” according to a press release.

St. Vincent de Paul Society’s alternative to payday loans (The Arlington Catholic Herald), Rated: A

 

In 2014, the Arlington District Council of St. Vincent de Paul Society began looking into the issue. In February, the group launched the Alternative Loan Program. People who qualify will be eligible for a loan of up to $1,000 to escape debt due to a payday loan. For people who need help with housing utilities, or medical bills, “we’ll still administer our assistance program,” said George Degnon, chairman of the loan committee.

To help run the program, the council partnered with Apple Federal Credit Union, which has several branches around Northern Virginia. “(The society) will maintain deposits at Apple Federal to serve as security for loans to borrowers whom the society recommends,” the group said in a press release. An interest rate of 3.1 percent will be retained by Apple Federal to cover administrative costs of the program.

Borrowers are required to take a budgeting class before qualifying for a loan, and can repay at a rate of just $25 a month, said Degnon.

Will 2018 Be the Year the Mortgage Industry Finally Bridges the Digital Divide? (JD Power Email), Rated: A

It should come as little surprise to those familiar with the mortgage industry that attendees at the recent Mortgage Bankers Association Annual Servicing Conference overwhelmingly selected Technology & Innovation when asked what their priorities were for 2018.

Digital Interaction Improves Mortgage Customer Satisfaction
For the first time, the 2017 J.D. Power U.S. Primary Mortgage Origination StudySM found both refinance and purchase customers cite online/website as the most frequent method of submitting a mortgage application. A total of 43% of mortgage customers report applying digitally in 2017, up from just 28% in 2016. Customers applying digitally also report substantially higher overall satisfaction with the mortgage origination process.

Still Need a Human Touch – Balancing Self-Service with Live Support Presents Challenges
The J.D. Power 2017 U.S. Retail Banking Satisfaction Study was the first to introduce
the idea of the “rise of the retail banking omnivore,” a financial services consumer that flips seamlessly through multiple interaction channels. Specifically, the study found that more customers than ever are using mobile banking (49% of Millennials, 31% of Gen X and 16% of Boomers). Despite this widespread adoption of the digital channel, 71% of all bank customers visited the branch an average of 14 times over the past year. Among Millennials, 71% used the branch, averaging 11 visits in the past year.

Source: J.D. Power

View the full report here.

HomeUnion Launches Investimate to Determine a Home’s Value as an Investment Property (Business Wire), Rated: A

HomeUnion, the leader in online residential real estate investing, has launched Investimate, a tool that enables consumers to see the potential value of a house as an investment using AI and machine learning. Investimate predicts a property’s investment value by estimating three factors: its price, rent, and operating expenses. Investimate is powered by big data on 110 million homes, institutional-quality research and on-the-ground experts with deep insight into local real estate market conditions.

With the launch of Investimate, HomeUnion is the only website that forecasts the performance of residential properties over a period of 15 years. After entering the address of a house, a consumer views comprehensive information on that property, including yields, appreciation and total returns. HomeUnion’s Investimate also displays in-depth information about the physical characteristics of each property, surrounding neighborhoods, historic price and rent trends, sales comps and other detailed information.

Real estate tech company Qualia closes $ 33M Series B (Bankless Times), Rated: A

Qualia, a real estate technology company streamlining the home closing process, today announced the closing of a $33M Series B led by Menlo Ventures with participation from 8VC, Bienville Capital, and Barry Sternlicht. With this new capital, Qualia will expand its engineering and product teams and accelerate their growth into additional markets across the U.S.

BBX Capital Corporation Reports Financial Results For the Fourth Quarter and Full Year, 2017 (MarketWired), Rated: A

Fourth Quarter 2017 Compared to Fourth Quarter 2016:

  • Total consolidated revenues of $214.7 million vs. $198.5 million, an increase of 8.2%
  • Net income attributable to shareholders of $44.0 million vs. $4.9 million
  • Diluted earnings per share of $0.43 vs. $0.05
  • Benefit for income taxes of $37.3 million vs. a provision for income taxes of $12.5 million due to a decrease in net deferred tax liabilities as a result of the enactment of the Tax Cuts and Jobs Act (2)
  • Free cash flow of $19.6 million vs. $16.0 million (1)

Year Ended December 31, 2017 Compared to the Year Ended December 31, 2016:

  • Total consolidated revenues of $815.8 million vs. $767.3 million, an increase of 6.3%
  • Net income attributable to shareholders of $82.2 million vs. $28.4 million
  • Diluted earnings per share of $0.79 vs. $0.32
  • Benefit for income taxes of $7.2 million vs. a provision for income taxes of $36.4 million primarily due to a decrease in net deferred tax liabilities (2)
  • Free cash flow of $43.6 million vs. $68.2 million (1)

Balance Sheet as of December 31, 2017 Compared to December 31, 2016:

  • Total consolidated assets of $1.6 billion vs. $1.4 billion
  • Total shareholders’ equity of $573.2 million vs. $454.6 million
  • Fully diluted book value per share of $5.52 vs. $4.22

Three equity crowdfunding platforms you should consider (Born2Invest),  Rated: A

Indiegogo

Founded in 2007, Indiegogo remains to be one of the most popular and easy-to-access crowdfunding platforms to date. The website is home to countless crowdfunding projects, most of which are gadgets and technological innovations. Some of the successful campaigns out of Indiegogo are the ONAGOfly smart droneSondors THIN electric bike, and popSLATE2, which serves as a second screen for iPhones.

Other than a huge selection of startups to invest on, Indiegogo is also one of the few crowdfunding platforms that provide initial coin offerings (ICO) for new cryptocurrencies, according to Black Enterprise.

SeedInvest

The minimum investment to be made at SeedInvest is $500. Also, since the projects on the website are highly vetted and promising, chances of success are bigger. The platform offers a customizable auto invest program that allows people to diversify their investments in up to 25 startups as well.

StraightUp

For New Yorkers, StraightUp is going to be of great help. Coming straight out of the incubation of HAP Ventures, the company carries a deep knowledge of property crowdfunding and The Big Apple’s real estate market.

What StraightUp does differently from other competitors in its field is that it invests along with its clients. Whatever project their client finds interesting, StraightUp also supports by being a part of its crowdfunding. In doing so, the interest between StraightUp and its clients are in line with each other.

Lendio adds Gainesville-Ocala franchise (Bankless Times), Rated: B

Small business loan marketplace Lendio today announced the opening of a new Lendio franchise in the Gainesville-Ocala, Florida region. Through the Lendio franchise program, Luis Salazar will help local businesses in the community apply for loans, review their options and secure funding, easing the financial hurdles for small business owners.

Lendio is an online service helping business owners find the working capital they need to grow their business through the company’s network of more than 75 lenders. Funding options include SBA loans, startup loans, equipment loans, and commercial real estate loans. In the last fiscal year alone, Lendio facilitated more than $300 million in funding.

 

HR Buzz: March Madness, Taxes and Mobility, Disappointing HiPos (Bloomberg), Rated: B

More than seven in 10 (71.4 percent) student debtors consider benefits covering their loans to be an important or very important factor when pondering job offers, a survey commissioned by student loan consolidation and refinancing service LendEDU and online lender Laurel Road found.

More than half (53.1 percent) would stay in a job they disliked if it was helping them pay off their student debt, and 58.4 percent would take a loan repayment benefit instead of additional vacation days. The survey was done Feb. 8-9 among 1,000 student borrowers who graduated between 2012 and 2017.

EnTrustPermal Expands Alternative Investment Capabilities With Dedicated Aviation Financing Team (PRNewswire), Rated: B

EnTrustPermal, a global alternative asset manager, today announced the expansion of its private debt opportunities investment platform with the addition of John Morabito, a veteran aviation investor from the CIT Group.  EnTrustPermal’s private debt opportunities capabilities now include direct leasing and financing vehicles in the maritime and aviation industries.

Commercial Real Estate Veteran Joins PeerStreet to Lead Commercial Real Estate Team (BusinessWire), Rated: B

PeerStreet is excited to announce the appointment of Greg Galusha as Head of Commercial Real Estate. He will be based in the firm’s headquarters in Los Angeles, California.

Galusha is responsible for leading PeerStreet’s growing commercial real estate division, which will help PeerStreet expand and enhance the current spectrum of commercial real estate investments offered through its marketplace.

 

Elevate Named as Finalist for LendIt Fintech 2018’s Financial Inclusion Award (Business Wire), 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 2018. This award is given to the company that has made the biggest impact in expanding access to financial services in new and innovative ways.

United Kingdom

Landbay Milestone: Hits £100 Million in Lending (Crowd Fund Insider), Rated: AAA

UK-based peer-to-peer lender Landbay announced this week it has hit its £100 million in lending milestone. The online lending platform achieved its half-way point in lending this past September and revealed that since then momentum has accelerated to result in near-on double of lending volumes in just six months. The lender also noted that the amount to more than £4 million in interest was earned by its investors from loans originated by its platform.

Landbay also confirmed that while lending volumes are always increasing, its focus remains on ensuring that all the lending it does is responsible and it is proud to affirm that its track-record of zero defaults or arrears is still intact.

Founded in 2013, Landbay describes itself as a fast-growing UK peer-to-peer lending platform that enables retail investors, institutions, and local governments to invest in UK’s private rented sector through the funding of residential buy-to-let mortgages.

Landbay is fully authorized and regulated by the FCA, but peer-to-peer lending platforms are not covered by the FSCS. Since its founding, Landbay has launched six other Seedrs campaigns, with the previous initiative attracting more than £1.6 million, which includes an investment from tennis star, Andy Murray.

 

Funding Circle Investors Lent More Than £113 Million to Over 1,700 UK Businesses in February 2018 (Crowdfund Insider), Rated: AAA

Source: Crowdfund Insider

On Wednesday, online lender Funding Circle announced investors lent more than £113 million to over 1,700 UK businesses throughout the month of February. Funding Circle also reported that over the last six months investors have helped more than 10,200 small businesses be able to gain access to financing. More than 678 million has been lent through its platform from August 2017 to February 2018. Breakdowns of February 2018 included the following:

Source: Crowdfund Insider

 

Woodford-backed Atom Bank grabs £149m as Spanish bank BBVA ups its stake (City A.M.), Rated: AAA

Challenger bank Atom, which counts rapper Will.i.am as a board adviser, has today grabbed £149m in its latest capital raising.

BBVA, which invested £85.4m and has ploughed in a total of £167m so far, upped its stake to 39 per cent and said the new investment signalled its “confidence in both the business strategy and management team”.

Augmentum’s fintech fund exceeds crowdfunding target to raise £695,000 (Peer2Peer Finance News). Rated: A

A VENTURE capital firm that has a stake in Zopa has breezed through its crowdfunding target to hit £695,000 before closing to new investments, and now looks set to raise £100m from a London flotation.

The initial £500,000 crowdfunding target was hit within 24 hours.

LendInvest Funds £5.5 million Development Deal on Historical Glaswegian Location (CrowdFund Insider), Rated: A

LendInvest also reported that construction is expected to be completed by late October 2018. The total GDV is forecast at just under £8.5 million.

Ablrate considers buying Collateral’s loan book (Peer2Peer Finance News), Rated: A

BUSINESS lender Ablrate is considering buying the loan book of Collateral, the peer-to-peer lending platform that recently went into administration.

Ablrate’s chief executive David Bradley-Ward said he has contacted Collateral’s administrators to find out how it can help.

LATTICE80 opens New Global Headquarters in London (LATTICE80), Rated: B

Global Fintech Hub LATTICE80 strategically relocates its global headquarters from Singapore to London.

LATTICE80 announced its plan to expand into several cities globally including London, New York and Seoul. By relocating its global hub to London, it can better support its global expansion plans in Europe, Asia and US this year. LATTICE80 will still keep the operations in Singapore to cover Southeast Asia.

European Union

Business Borrowers Should Think Outside the Bank (Payments Journal), Rated: A

Peer-to-Peer lending for small businesses is not new, as those of us on this side of the pond can recall from Lending Club and Prosper, and surely not without lender risk. One of the points made in this piece is that SMEs in Scotland account for ‘more than half’ of all private sector employment.  This is not dissimilar to the world in general, although SME definitions vary widely. In the U.S. for example, there are about 102 million people employed and we would estimate that roughly 60% work for businesses with less than 100 employees. Among these are about 24 million businesses with no employees (sole-proprietors).

They key to this business space however is to help fill a liquidity gap in the market that banks are either unwilling or unable to accommodate, given capital regulations, asset risk ratings, liquidity ratios and so forth.

Real estate crowdfunding company Housers teams up with Redpiso (PropertyPortalWatch), Rated A

The participative real estate financing platform Housers has signed a collaboration agreement with Redpiso so that its promoters appear on the website of this real estate company, the two companies reported today.

 

Capital Markets Union (European Commission), Rated: B

Commission presents Action Plans on sustainable finance and financial technology and adopts legislative proposal on crowdfunding

Action Plan on Financial Technology

The Action Plan sets out 23 steps to enable innovative business models to scale up, support the uptake of new technologies, increase cybersecurity and the integrity of the financial system.

Legislative proposal on crowdfunding

The Commission also put forward new rules that will help crowdfunding platforms to grow across the EU’s single market.

 

International

Is a new and better culture evolving in the credit market? (AltFi), Rated: AAA

The promise of direct lending 2.0

The fastest-growing and potentially huge segment of private credit is being brought about by tech and data powered lending platforms – Direct Lending 2.0. These groups have evolved from their P2P roots. Business models are being re-examined, which is healthy. Several, such as Auxmoney, Funding Circle and Lending Club are now large originators and servicers of SME and consumer credits direct for institutional investors. Just one UK-based platform lender originating SME credits of around 100,000 Euros per clip made more loans of that size to UK companies than the entire UK banking system managed in Q4. This potentially vast capital market has the potential to be a sustainable alternative to the banking system.

The arrival of credit culture 2.0?

In this context it was interesting to see Patty McCord, world-beating Netflix’s ‘Chief Talent Officer’ (we don’t see many of those in the credit market) recently join Lending Club.

Meeting the Fintech Challenge in Digital Consumer Lending: Strategies and Technologies for Innovation (Celent), Rated: A

Digital lending is not limited to fintechs; banks and credit unions have many strengths which, when combined with digital technology, will enable them to thrive long after the Fintech Era ends.

Source: Celent

Finastra, Microsoft form strategic alliance to shape future of financial services software (RealWire), Rated: A

Finastra and Microsoft have formed a strategic alliance to deliver secure, flexible and cost effective financial services cloud solutions. As part of the alliance, Microsoft Azure, Microsoft’s enterprise-ready trusted cloud platform, will underpin FusionFabric.cloud as Finastra’s strategic cloud platform. In addition, Finastra will launch a selection of its global payments and retail banking products on Azure over the course of this year.

India

This husband-wife duo makes AnyTimeLoan a reality (Your Story), Rated: AAA

Keerthi is an engineering graduate and an alumnus of IIM and ISB with over 14 years of experience across financial service and infrastructure sectors. He co-founded the AnyTimeLoan along with his wife Neha Jain, 32, who is a Chartered Accountant by profession and has over nine years of experience in taxation, compliance, and audit. She was associated as Partner in a CA firm before she took over ATL as co-founder wherein she handles entire finance, compliance, etc.

ATL has also applied to the RBI and is in the process of seeking NBFC P2P license.

For the financial year 2017-18, it is clocking revenues worth Rs 300 lakh, with total loans disbursed around Rs 39.8 crores. It also claims to have a default rate of less than 0.23 percent.

Africa

Africa’s banks lag behind on innovation in financial services (Financial Times), Rated: AAA

African central banks are stifling development by failing to keep up with financial services innovation, according to the head of a UN economic agency and industry executives.
Penetration of mobile money is more than 90 per cent in countries such as Kenya, where Safaricom, a telecoms provider, developed the Mpesa platform in 2007. But it is only 1 per cent in Nigeria.

Meanwhile, some central banks, such as in Tanzania, allowed innovations such as payments between different telecoms operators three years ago while others still ban them.

Many financial services companies, such as mobile-based micro-loan companies, have escaped formal regulation in most African countries as central banks and telecoms regulators struggle to categorise them.

Authors:

George Popescu
Allen Taylor

Wednesday March 7 2018, Daily News Digest

marketplace lending categories

News Comments Today’s main news: Citigroup may open a national digital bank. Marcus to open in UK, Goldman recruiting engineers. Robo.Cash posts 2017 results. Tera Funding to hedge P2P project finance risk. Today’s main analysis: Preparing taxes for LendingClub, Prosper investments. Today’s thought-provoking articles: Why institutional investors turn to marketplace loans. Branches are still disappearing despite Chase’s investment. Credit card […]

marketplace lending categories

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

Canada

News Summary

United States

Citigroup moving toward ‘national digital bank’ (Business Insider), Rated: AAA

Citigroup Inc is laying the foundation, through a growing network of mobile banking tools, to support the launch of a national digital consumer bank sometime within the next three years, its chief financial officer said on Tuesday.

Citigroup, the fourth-biggest U.S. bank by assets, had fewer than 700 U.S. branches at year-end compared with more than 4,000 at the three biggest banks, JPMorgan Chase & Co, Bank of America Corp and Wells Fargo & Co.

Citigroup, Kabbage Form Consortium on Fintech Cybersecurity (WSJ), Rated: A

Four financial companies including Citigroup Inc.C -0.48% and online lender Kabbage Inc. said Tuesday they have formed a consortium to address fintech firms’ cybersecurity risks, a sign of the industry’s growing links to traditional banks and insurers.

 

Why institutional investors are turning to marketplace loans (LendingClub), Rated: AAA

Greenwich Associates, an unaffiliated research company, conducted a study to better understand how marketplace lending is perceived and the current state of adoption within the institutional investing community.

Study Finding #1: Higher yields drive investment.

Sixty-seven percent of institutional investors cited the higher yield that marketplace loans tend to offer as their primary reason for investing.

Study Finding #2: Different investors use the asset for different things.

Because marketplace loans can be used for many different reasons, one of the first questions that investors may face when considering marketplace loans is how to categorize them. For over two-thirds of surveyed institutional investors currently invested in MPL (see chart below), they fall in the category of structured products, putting them alongside ABS and collateralized loan obligations (CLOs). Almost half of current investors reported viewing them as short-duration instruments and one-third as high-yield bonds.

Almost 40% of institutional investors who are not yet invested in marketplace loans said they didn’t know how to characterize them.

Study Finding #3: The path to institutional adoption will be driven by a few key catalysts.

Since mid-2017, however, each new issuance was rated by at least one rating agency, removing this obstacle and further broadening exposure to the asset class.

Investors deeply value data and analytics, which are key to understanding the credit profile of borrowers on marketplace lending platforms.

While the secondary market for marketplace loans is illiquid, there is a more active secondary market for the securitized offerings.

Study Finding #4: Marketplace lending is here to stay.

A majority of current investors, 52%, believe that marketplace lending will be a significant player in the financial system in the next 10 years. This is another meaningful vote of confidence in the industry.

New phase of growth and development for ‘Peer-to-Peer’ lending (IBS Intelligence), Rated: A

Among the investors participating in a new Greenwich Associates study, 30% of institutions not currently investing in marketplace loans (MPL) are watching the space or conducting research and due diligence on the asset class—a level of interest that suggests future institutional involvement is on the horizon.

The first marketplace loans were securitised in September 2013, and the trend has accelerated rapidly since then. Cumulative issuance now stands at $28.2 billion, with $4.4 billion issued in Q4 2017.

LendingClub and Prosper Tax Information for 2018 (Lend Academy), Rated: AAA

Note that investors who invest through a retirement account do not have to worry about tax reporting. Here at Lend Academy we believe there is a strong case for investing in marketplace lending through a product like an IRA.

Copied below is how LendingClub summarizes the tax treatment of investing in loans on the platform:

Generally, gains and losses from recoveries, sales or charge-offs related to LendingClub Notes are reported for tax purposes as capital gains or losses, rather than ordinary gains or losses. Generally, LendingClub Notes are considered capital assets because they are owned for the purposes of investment (similar to a stock or a bond). Generally, realized capital losses are first offset against realized capital gains. For individuals, any excess capital losses can be deducted against ordinary income up to $3,000 ($1,500 if married filing separately). Capital losses in excess of this limit may be carried forward to later years to reduce capital gains or ordinary income until the capital losses are fully utilized.

Source: Lend Academy

I had $12.21 in proceeds (recoveries) from loans that were charged off which is offset by the cost basis of charged off loans, $204.33. This resulted in a net loss of $192.12.  On my 1099-B outlining long-term transactions I had proceeds of $109.64 with a cost basis of charged off loans of $1,469.02 resulting in a net loss of $1,359.39. The short and long-term transactions roll up on the 1099-B summary shared above (middle box). Ignoring taxes, I earned a profit of about $500 on my LendingClub account for the year.

Source: Lend Academy

Filing Taxes for a Prosper Account

Below is my 1099-OID which includes the net interest of $840.62 I received for the year.

Source: Lend Academy

My losses totaled $834.71 which means I earned a net return of around $100 for the year.

How would regulators react to Amazon-JPM checking partnership? (American Banker), Rated: A

The negotiations between Amazon and big banks like JPMorgan Chase and Capital One to offer a checking-account-like product pose significant questions for regulators about the e-commerce giant pushing further into the banking space.

Who owns the customer?

If the bank “owns the customer,” then “the rules governing banks protect the consumer,” said Karen Shaw Petrou, managing partner of Washington-based financial services consultant, Federal Financial Analytics. “If the bank doesn’t own the customer, then the rules — not just the consumer protection rules but the safety and soundness rules — are both different.”

What is Amazon’s role in the accounts?

If JPMorgan is “contracting with Amazon to do the marketing and customer intake, in that case, Amazon is subject to the regulation for those activities,” similar to other bank partnerships, said Brian Knight, director of the program on financial regulation and a senior research fellow at the Mercatus Center at George Mason University.

Who, if anyone, would regulate Amazon?

Another tricky question is which agency would regulate the partnership depending on how it is structured. For example, if Amazon were to act as a vendor to the bank, the e-commerce company would fall under a wide range of bank regulations involving partnerships and data security. However, if JPMorgan were to be a vendor to Amazon, those regulators would have limited influence over the deal.

Branches are still going away, despite Chase’s flashy investment (Tearsheet), Rated: AAA

Earlier this year JPMorgan Chase announced it’s investing $20 billion in 400 new branches and last week at the company’s Investor Day CFO Marianne Lake said 75 percent of its deposit growth comes from customers that visit its branches. Research published last month by Novantas shows 60 percent of Americans would still prefer opening a checking account at a branch than on digital channels and a September report by Deloitte similarly found 56 percent of people prefer to open bank accounts in branches (based on a survey of 3,000 consumers who had opened a deposit wealth management or consumer loan between January 2016 and May 2017).

JPMorgan Chase may be opening hundreds of new branches, but that hardly suggests every bank will follow.

Source: Tearsheet

Legacy vendors have been losing revenue
Global financial services and ATM producer NCR has been watching revenue fall over the past year where ATM sales and software licenses are concerned as revenue from services and cloud has shown a slight uptick. Diebold Nixdorf, another manufacturer of connected commerce and self-service products in the banking and retail industries, reported a 9.6 percent decline in revenue from banking sector services to $3.4 billion from 2016 to 2017.

Reimagining Lending Risk Management for the Digital Era (Lend Academy), Rated: A

As of February 2018, US bank lending of various kinds – auto loans, commercial credit, mortgages, credit cards or small business lending – constituted $11.7 Trillion, representing around 60% of US GDP and 70% of commercial banking assets.

A tale of two startups with ‘superstore’ ambitions: Robinhood and Cadre (TechCrunch), Rated: A

“If you think about Amazon, they took the book model, built brand equity, trust, credibility and now they are a superstore for any retail product,” Cadre’s co-founder and CEO Ryan Williams told attendees at an industry event in San Francisco last week. “We’re doing the same for the investments world.”

Robinhood’s co-founder and CEO, Vlad Tenev, speaking at the same event later in the evening, had much the same messaging. “Five years from now,” Tenev told the crowd, Robinhood will be a “full service financial institution” with every product one can find at a “local bank branch and more.”

‘PIN on glass’ is still a novel concept for U.S. retailers (Tearsheet), Rated: A

Though common in Europe, chip cards with PIN numbers still haven’t caught on in the U.S. But a mobile chip-and-PIN terminal could nudge more retailers to get on board.

TransUnion Introduces New IDVision Alerts to Mitigate Rise of More Sophisticated, Emerging Risks (Nasdaq), Rated: A

A new TransUnion (NYSE:TRU) analysis found that the growth in outstanding balances of suspected synthetic fraud in the credit card market is slowing in large part due to recently focused efforts by issuers to prevent such instances of fraud.

Outstanding suspected synthetic fraud balances rose 5.2% between Q4 2016 ($276.01 million) and Q4 2017 ($290.37 million). This was a far smaller percentage rise than what was observed the previous year when such balances rose 68.5% between Q4 2015 ($163.77 million) and Q4 2016. Despite the slowing of fraud balance growth in the credit card space, TransUnion found that the incidence of such fraud on credit applications remains similar to last year, moving from 0.59% at the end of 2016 to 0.60% in 2017.

While the growth of synthetic fraud in the credit card market is slowing due to proactive measures being taken by issuers, outstanding balances of suspected synthetic fraud identities increased 6.6% to $885.42 million in Q4 2017, up from $830.25 million in Q4 2016 for auto loans, credit cards, personal loans and retail cards combined.

TransUnion today introduced 25 new IDVision Alerts and data enhancements to its current collection of alerts, including new alerts for possible synthetic fraud, new or recently created identities and social security numbers that may be compromised. In total, TransUnion IDVision Alerts now provide more than 65 notifications to businesses about high risk, suspicious identities and other potentially fraudulent activities.

 

Varo Money Helps Americans With High-Yield Savings Accounts & SMS Alerts (Varo Email), Rated: A

Mobile banking startup Many Americans Are Struggling to Achieve Good Financial Health

A recent survey of more than 1,000 U.S. adults age 18+, conducted by Propeller Insights on behalf of Varo Money, determined that 85 percent of American adults sometimes feel stressed out about money, and a full 30 percent feel stressed out about money constantly.

  • About 1 in 5 Americans (19 percent) are living paycheck to paycheck
  • More than two-thirds of Americans (69 percent) report having had to dip into their savings to make it to the next payday at least once in the past two years
  • 55 percent of millennials have dipped into their savings in the past few months
  • About a third (31 percent) of millennials understand what their finances will look like from month to month only “somewhat” or “not at all”

Helping Customers to Make More from Their Money

Varo’s 1.25% APY Savings Accounts have no fees or minimum balances and offer a rate that is more than 60x the average rate offered by traditional banks. According to Varo’s two new features are part of its continued expansion of features and focus on financial health for Varo customers:

  • 1.25% APY High-Yield Savings Account: All Varo customers can easily open an online savings account with a few taps through the Varo app and receive a rate of 1.25% APY. Customers can access funds 24/7 and easily transfer money from their checking into savings. There are no fees or minimum balances required.
  • SMS Alerts: Customers can receive notifications based on aggregated financial activity across all linked accounts that let them know how they’re doing on income, saving, and if they are at risk of overspending so they can stay on top of their money effortlessly. Standard text messaging and/or data rates from the wireless service provider may apply.

Startup, Rentlender Revolutionizes the Rental Market, Offering Finance Options for Renters (PR Newswire), Rated: A

According to a Harvard University housing report, over 110 million Americans, or about 36 percent of households, now live in rental units — an increase of 9 million renters over the past decade — the largest 10-year gain on record.

Unfortunately, other records are being smashed too: the number of cost-burdened renters — that is, households paying more than 30% of their income on housing — jumped to 21.3 million. And a record 11.4 million Americans are spending more than half their income on rent. The news is even worse for New Yorkers, who last year spent 65.2%, or two-thirds of their total income, on rent2.

With upfront rental deposits and fees at move-in costing over $3,000 (more if you live in New York City, where comparable costs typically top $20,000); there has never been a greater need for finance options for renters.

Beginning today, New York City-based startup Rentlender is partnering with Upstart to provide modern financing solutions for renters.

Renters must meet a minimum set of requirements to qualify for a loan including having a minimum credit score of 620 and a maximum debt-to-income ratio of 45%.  All loans are originated by Cross River Bank, an FDIC insured New Jersey state chartered commercial bank, and lending terms and fees are as follows:

  • Loan amounts: $1,000 to $50,0003
  • Loan duration: 3 or 5 years
  • Annual percentage rate: 7.436.25% to 29.99%4
  • Origination fee: 0% – 8% of loan amount
  • No prepayment fee

Renters can use these loans to ease the burden of renting in a number of ways:

  • Upfront costs – Pay first month, last month, security deposit and broker fees
  • Individual Months of Rent – Finance one or two months rent
  • A Full Year’s Rent – Finance a full year’s rent in addition to up-front costs

The loan application process is Powered by Upstart and provides renters with a fast, easy and paperless application process:

  1. Check Your Rate –  With a quick form, renters can see the loan options for which they qualify.
  2. Submit an Application – Complete the application online and indicate the bank account where funds should be sent.
  3. Accept Your Loan – Upon approval, log in and digitally sign loan documents. Funds can be available as quickly as the next business day.

Crowdfunding enters the New York City real estate scene (Born2Invest), Rated: A

These two problems are big hurdles for investors, but StraightUp is offering a solution to these woes. Crowdfund Insider notes that it is a new real estate crowdfunding platform that provides backers and investors an “unbeatable opportunity” on properties in New York City.

Capital markets tech firm Capitolis snagged $ 29 million in VC (New York Business Journal), Rated: A

Who gets: Capitolis, a New York-based technology provider for the capital markets, secured new funding.

Amount raised: $20 million in series A financing, plus $9 million in seed funding.

Credible Appoints Jobe Danganan as General Counsel and Corporate Secretary (BusinessWire), Rated: B

Credible, the consumer finance marketplace that helps consumers save money and make smarter financial decisions, today announced that it has appointed Jobe Danganan as general counsel and corporate secretary, effective immediately.

GDS Link to Exhibit at LendIt Fintech USA 2018 (PRWeb), Rated: B

GDS Link, a global provider of credit risk management solutions and consulting for multiple verticals within the financial services industry including marketplace lending for both consumer and small business, point of sale retail finance, alternative financial services, credit card, auto and leasing, will be attending LendIt Fintech USA 2018, April 9-11 at the Moscone West in San Francisco.

Upgrade Inc. Named a 2018 ‘Best Place to Work in the Bay Area’ (PR Newswire), Rated: B

Upgrade, Inc. (), a consumer credit platform that combines personal loans with tools that help consumers understand and monitor their credit, announced that it has been named a ‘Best Place to Work in the Bay Area’ finalist in the small company category by the San Francisco Business Times and Silicon Valley Business Journal.

United Kingdom

Goldman Sachs is recruiting at least 6 people for the UK launch of its online lender Marcus (Business Insider), Rated: AAA

Goldman Sachs is recruiting engineers in London to help build and launch its online lender, Marcus, in the UK.

Credit Card Customers Prepare for Debt Crackdown (Market Oracle), Rated: AAA

The Financial Conduct Authority (FCA) has, as of this month, given credit card providers six months to adhere to the new rules that tackle the issues surrounding persistent debt*.

From September 2018, credit card providers must review the last 18-month history of a borrower’s repayment records, if they are in persistent debt, and assess whether they are subject to the new rules.

Source: Market Oracle

Investors flock to Assetz Capital IFISA (P2P Finance News), Rated: A

ASSETZ Capital has had almost 3,000 investors start the process of setting up an Innovative Finance ISA (IFISA), with those who have already started investing putting an average of nearly £12,000 into the product.

Business borrowers should think outside the bank (Insider.co.uk), Rated: A

SMEs are the backbone of the Scottish economy, making up 99% of the business population and accounting for more than half of all private sector employment.

The unemployment rate in Scotland rose to 4.5% in the final three months of last year, slightly higher than the rate of 4.4% for the UK as a whole, but there are grounds for optimism. Independent forecasts suggest that growth in the Scottish economy will be slightly higher than last year.

According to research from the British Business Bank , published on 20 February, net bank lending remained “relatively flat” in 2017, while P2P business lending volumes rose by 51% to almost £1.8 billion.

Why SME banking may spawn the industry’s next big winners (Euromoney), Rated: A

Small businesses, which account for more than 99% of private businesses in the UK and in aggregate contribute more than half of turnover and employment, are particularly poorly served by big banks.

The big five high street lenders are built for serving either retail customers or medium-size and larger companies with collateral to back three-year and longer term loans that the banks like to hawk to companies that do not really need them as a way to sell associated risk management.

Small businesses want short-term, flexible working capital with no punishing fees for low usage or early repayment. This is expensive for banks to underwrite – especially for new startups and sole traders lacking several years’ worth of financial history – and to administer. Few small businesses want the interest-rate hedging and FX facilities that banks like to bundle up with term loans for medium-size and larger corporate customers.

The market is at last now producing non-bank competitors looking to provide the right kinds of services and products for small businesses – ones that give these challengers a shot at the £2 billion of annual revenue the British Bankers Association suggests SMEs now pay for financial services.

Wealth Wizards launches AI robo system (FT Adviser), Rated: A

Wealth Wizards, the robo-adviser majority owned by LV, has launched an artificial intelligence service which will learn how advisers serve their clients and replicate that house view.

China

Chinese IPOs In US Continue To Disappoint Investors (China Money Network), Rated: AAA

Industry watchers foresee a 25% to 30% increase in the the number of Chinese IPOs in the U.S. in 2018, versus 2017. That’s a significant gain given that the number of Chinese IPOs in the U.S. in 2017 was more than double the number in 2016.

Peer-to-peer lending company Qudian Inc. raised more than a billion dollars when it went public on the New York Stock Exchange in last October. Today the stock is down just over 50%, according to data from Dealogic, a loss of more than US$500 million for investors.

The average PE ratio for profitable Chinese companies listing in the U.S. reportedly rose to 50 in 2017, versus 31 a year earlier, driven in part by the marketing efforts of the three banks behinds most of the IPOs, Morgan Stanley, Credit Suisse AG, and Goldman Sachs Group Inc.

Another problem has been the Chinese government’s crack down on online consumer lending. This has hurt the businesses of financial technology companies, which made up the largest group of IPOs in 2017.

European Union

Online Lender Robo.Cash Posts 2017 Stats (Crowdfund Insider), Rated: AAA

Robo.cash outlined the results of its first year in operation on the European P2P lending market: 2,000 investors from the EU and Switzerland invested over €3M in the issue of 330,000 short-term PDL-loans in Kazakhstan and Spain. The average inflow of investments is €240,000 with 150 new investors joining the platform monthly.Robo.Cash views the results and platform dynamics as proving the growing demand for complex automated solutions in the global alternative fintech.

The European investors financed 330 thousand short-term PDL-loans (Financial IT), Rated: A

The European P2P-platform Robo.cash was launched in Latvia on February 21, 2017. It has achieved to attract over €3 million and 2.000 investors from 29 European countries (the EU and Switzerland) in one year. The average inflow of investments is €240 000 with 150 new investors joining the platform monthly.

International

The Pro-Growth Magic of Inflation Anchoring: Eco Research Wrap (Bloomberg), Rated: AAA

Credit-constrained industries grow faster in countries with well-anchored inflation expectations, based on an IMF analysis of data covering 22 manufacturing industries for 36 advanced and emerging-market economies between 1990 and 2014. It seems to be the anchoring – not the level – that matters for growth. So while most advanced economies angle for 2 percent, there’s nothing magical about that number.

Killing zombies

The share of global zombie firms – low-productivity companies that struggle to meet their interest payments – has more than tripled in the past two decades, climbing to 2 percent of companies in 2016 from 0.6 percent in 1996. Early, incomplete data for 2017 indicate that the may finally be disappearing, suggesting that climbing interest rates are making it harder for the laggard firms to hang on.

Websites for Bitcoin (BTC) Borrowing and Lending (Hade Platform), Rated: A

1) Bitbond

They have more than 100,000 happy borrowers and investors. The peer to peer Bitcoin borrowing community has offered loans to more than 2500 borrowers. The loan application process is simple, and the loans can be received within one hour. Investors receive up to 13% interest on the loans they give, with some investors having a history of loaning to more than 100 borrowers. The duration of the loans, which are generally to help finance small businesses, range from 6 months to 3 years. Bitbond has users from more than 120 countries, and has an investment volume above $1million.

2) Btcpop

With a large user base above 20,000, from more than 60 countries, Btcpop holds a volume above $1million.

3) BTCjam

BTCjam has more than 100,000 users from more than 200 countries. The website supports peer to peer lending and has a volume of more than $13 Million BTC in their holding.

Australia

RateSetter CEO: Comprehensive credit reporting and open banking to help Australia play catch-up (mozo), Rated: AAA

For many Australians hearing the words ‘credit history’ may well elicit a shudder down their spine – especially if they’re looking at taking out a finance option such as a personal loan, credit card or home loan. But in just under four months that could well change, with the impending implementation of mandatory Comprehensive Credit Reporting (CCR).

From July 1, the big four banks will be required to have at least 50% of their credit data – both positive and negative – available to be shared, which Daniel Foggo, Australian CEO of peer-to-peer lender RateSetter, suggests will help Australia catch up to the rest of the world.

Promontory says AI for banking compliance ‘a long game’ (Financial Review), Rated: A

The inaugural chairman of the Australian Prudential Regulation Authority says it will take “massive investment” before regulators let banks use artificial intelligence to meet their multimillion-dollar compliance obligations.

While AI is being used to deliver personalised banking experiences to customers via “chatbots” and helping bank staff make more customer-centric decisions, the technology which Promontory thinks has the capacity to cut sky-high compliance costs is still a work in progress.

The company is combining its regulatory prowess with IBM’s artificial intelligence technology known as “Watson” to cut costs, but also to improve accuracy for regulators.

Verrency, a global Australian payments platform and fintech marketplace, has been accepted into the latest fintech cohort of Silicon Valley-based technology accelerator Plug and Play Tech Center.
India

Women are Looking at Alternative Forms of Investments and Tech is Here to Help (Entrepreneur), Rated: AAA

More and more women are taking charge of their financial decisions and moving beyond the usual investment routes and looking at P2P lending, mutual funds as options.

Rajat Gandhi, Founder and CEO, Faircent, believes that gone are the days when women investors looked only at traditional tools of investments as part of their financial planning. “These ambitious go-getters are increasingly ditching the traditional tools of savings and investments and exploring the relatively new and more lucrative forms of investments,” said Gandhi.

At Faircent, 14% of the lenders registered are women and they account for 21% of the total amount disbursed through the platform.

“Female lenders on our platform are earning an average NAR of approx. 20% p.a proving that women tend to invest wisely; know how to take calculated risks, can meticulously diversify their investment portfolio across different borrowers and hence, end up enjoying better returns,” asserted Gandhi.

Meanwhile, Keerti Kumar Jain, founder and CEO, of Anytime Loan, shared the following statistics from their platform regarding female lenders.

Blockchain: a new technology or a new kind of enterprise? (YourStory), Rated: A

Let us imagine a new kind of enterprise that is designed to create value through a self-regulating method that is both decentralised and auto-incentivising. This is in direct contrast to the conventional top-down hierarchical, command and control enterprise.

We will do this in a two-step process.

First, we set up an initial monetary policy (“the white paper”) in the form of a finite number of digital tokens that represents the overall value of the enterprise. This also creates the requisite economic scarcity to start with that is essential to this approach.

Second, we set up clear encodable rules for how the participants who generate value in the enterprise will “earn” in tokens. This incentivises the participants to “do the right thing” to generate value for the enterprise, which in turn increases the value of the tokens.

Distributed ledgers

One basic requirement for setting up such an enterprise, is the use of a transparent immutable Distributed Ledger to establish trust between all participants of the enterprise.

Examples of the new kind of enterprise

A Distributed P2P Lending Network in which Lenders and Borrowers are joined by a network of Verifiers, Hosting providers and Developers, all incentivised to build, maintain and use the distributed lending platform that is hosted on a blockchain technology.

Asia

Tera Funding sets out to hedge risks of P2P project finance (The Korea Herald), Rated: AAA

The high return — often at above 10 percent — that the instrument promises to the lenders, triggered a rush into the sector, and roughly a third of loans on P2P platforms went into project financing as of September.

As such, the default rate of the average local project financing P2P platform operators is relatively higher at 1.7 percent, over threefold that of other P2P platforms, according to an estimate by the Financial Services Commission.

The returns are roughly estimated 8-15 percent of investment per a year, without tax deducted, depending on the level of risk.

Fintech lenders hit back at OJK (The Jakarta Post), Rated: A

Indonesia’s financial technology (fintech) players were in shock when they found out that their main regulator, the Financial Services Authority (OJK), had some disconcerting views about their businesses despite having a relatively close relationship.

Executives of peer-to-peer (P2P) lending fintech firms on Tuesday voiced their concerns about a controversial statement from OJK chairman W…

Funding for RedDoorz, Hotelogix, and 23Mofang (Tech in Asia), Rated: A

Online lender Finova Capital secures US$6 million Sequoia Capital backing (India). The startup provides loans to small businesses in India’s tier-2 cities and rural areas. Finova will use the funding for technology development and hiring talent. Sequoia India made its investment in two tranches, the first taking place late last year.

Paytm Mall in talks with SoftBank to raise US$600 million (India).

Canada

Katipult Named Finalist For Most Promising Partnership Award at Lendit Fintech Industry Awards (Crowfund Insider), Rated: B

Canadian fintech Katipult announced last week it has been nominated, alongside Polymath Inc., for the Most Promising Partnership Award at the second annual Lendit Fintech Industry awards in April. According to Katipult, the partnership will be competing against some of the world’s finance and fintech giants including partnerships involving Goldman Sachs, Macquarie Group, Swedbank, and Lending Club.

Authors:

George Popescu
Allen Taylor

Friday February 23 2018, Daily News Digest

Marketing Lending Return

News Comments Today’s main news: LendingClub increases interest rates. LendingTree plunges 8.13%. P2P default forecasts are on the rise. 29% of Australian consumers believe comprehensive credit reporting changes how they manage finances. Today’s main analysis: LendingTree’s Q4 and full year 2017 results. Today’s thought-provoking articles: Peter Renton shares personal quarterly marketplace lending results. 6 online personal loan lenders that […]

Marketing Lending Return

News Comments

United States

United Kingdom

International

Australia

News Summary

United States

LendingClub Increases Interest Rates on Loans, Files 8K on Change (Crowdfund Insider), Rated: AAA

Marketplace lending platform LendingClub (NYSE:LC) has filed an 8K with the Securities and Exchange Commission regarding interest rate changes.

The rate changes came into affect on February 20th with notable changes including of 0.38% for loan grade E1, 0.39% for loan grades D2-D4, 0.40% for loan grade D5, and 0.47% for loan grade E5.

LendingTree Inc. (TREE) Plunges 8.13% on February 22 (Equities), Rated: AAA

LendingTree Inc. (TREE) had a rough trading day for Thursday February 22 as shares tumbled 8.13%, or a loss of $-30.2 per share, to close at $341.05. After opening the day at $343.05, shares of LendingTree Inc. traded as high as $358.80 and as low as $326.61. Volume was 688,145 shares over 9,300 trades, against an average daily volume of 221,877 shares and a total float of 11.97 million.

LendingTree Reports 4Q & FY 2017 Results Above Guidance (PR Newswire), Rated: AAA

Fourth Quarter 2017 Business Highlights

  • Revenue from mortgage products of $67.7 million represents an increase of 22% over fourth quarter 2016.
  • Revenue from non-mortgage products of $93.3 million in the fourth quarter represents an increase of 106% over the fourth quarter 2016 and comprised 58% of total revenue.
  • Credit card revenue of $36.9 million. On a proforma basis, giving effect to the CompareCards and MagnifyMoney acquisitions as if they had occurred on January 1, 2016, credit cards revenue grew 35% over fourth quarter 2016.
  • Personal loan revenue of $25.3 million represents accelerated growth of 74% over fourth quarter 2016.
  • Home equity revenue continued its strong momentum, increasing 138% over fourth quarter 2016, and marking the ninth consecutive quarter of year-over-year growth exceeding 100%.
  • More than 7.4 million consumers have now signed up for free credit scores and savings alerts through My LendingTree, and the revenue contribution from My LendingTree grew 109% in the fourth quarter compared to the prior year period.
Source: LendingTree

Fourth Quarter 2017 Financial Highlights

  • Consolidated revenue of $161.0 million represents an increase of $60.2 million, or 60%, over revenue in the fourth quarter 2016.
  • GAAP Net Loss from Continuing Operations of $6.5 million, or $0.54 per share, was impacted by a $9.1 millioncharge related to the revaluation of deferred tax assets as a result of U.S. tax law changes and a one-time $10 million commitment to establish a charitable foundation.
  • Variable Marketing Margin of $56.1 million represents an increase of $19.3 million, or 52%, over fourth quarter 2016.
  • Adjusted EBITDA of $29.6 million increased $10.7 million, or 57%, over fourth quarter 2016.
  • Adjusted Net Income per share of $0.84 represents an increase of $0.07, or 9%, over fourth quarter 2016.
  • On November 21, 2017, our wholly-owned subsidiary LendingTree, LLC entered into an amended and restated $250.0 million five-year senior secured revolving credit facility which matures on November 21, 2022. Borrowings under the revolving credit facility can be used to finance working capital needs, capital expenditures, and general corporate purposes, including permitted acquisitions. We do not currently have any borrowings outstanding under the revolving credit facility.
  • During fourth quarter 2017, the company repurchased 33 thousand shares of its stock at a weighted-average price per share of $331 for aggregate consideration of $11.0 million. In the first quarter 2018 to-date, the company has repurchased 30 thousand shares at a weighted-average price per share of $362 for aggregate consideration of $11.0 million.
  • On February 21, 2018, the Company’s Board of Directors approved an additional $100 million in share repurchase authorization. As of that date, $116.7 million in share repurchase authorization remained available.

Full-Year 2017 Financial Highlights

  • Record consolidated revenue of $617.7 million, an increase of $233.3 million or 61%, over revenue in full-year 2016.
  • Net Income from Continuing Operations of $19.4 million, or $1.42 per diluted share.
  • Record Variable Marketing Margin of $207 million, an increase of $65.8 million or 47%, over full-year 2016.
  • Record Adjusted EBITDA of $115.1 million, an increase of $45.3 million or 65%, over full-year 2016.
  • Adjusted Net Income per share of $3.78 increased $0.80, or 27%, over full-year 2016.

My Quarterly Marketplace Lending Results – Q4 2017 (Lend Academy), Rated: AAA

The long decline in my returns has continued with 2017 by far my worst year since I began investing with LendingClub back in 2009. My overall TTM return  in Q4 2017 was 5.01% compared to 6.64% in Q3 2017 and 8.07% one year ago.

Source: Lend Academy

My main Prosper taxable account has had $50,000 of investments starting in 2010 and continuing until 2013. Since then I have just been reinvesting all earnings.

Source: Lend Academy

Lend Academy P2P Fund

While 5.04% is down considerably from where the fund has been it is still significantly better than the 2.77% I received at my six original marketplace lending accounts.

AlphaFlow

What I like about AlphaFlow is that you can quickly build a diversified portfolio of 75-100 properties.

Source: Lend Academy

7 Personal Loan Companies That Help You Pay Off Debt Quickly (Student Loan Hero), Rated: AAA

2. SoFi

The main advantage of SoFi is the fact that it’s the only personal loan company on this list that allows you to borrow up to $100,000 for debt consolidation. Additionally, SoFi doesn’t have a minimum FICO requirement, which makes it the best way to consolidate debt with bad credit. The minimum annual income is on the high side to make up for it, however.

3. Earnest

Earnest has a minimum credit score requirement, but it also has a flexible underwriting program that can take into account special circumstances. There’s no income requirement, so Earnest loans can be useful for entrepreneurs.

4. Payoff

Payoff is a personal loan company that offers loans specifically aimed at consolidating or refinancing your credit card balances. However, the maximum loan amount is on the low end for our list. If you have a smaller amount of debt to consolidate, Payoff might work for you.

5. Upstart

  • Minimum FICO score: 620
  • Minimum annual income: $12,000
  • Loan amounts: $1,000 to $50,000
  • Loan terms: three and five years
  • Interest rates: fixed
  • Credit check: soft pull for rate estimates
  • Fees: origination fee of 1% to 8%

6. LendingClub

  • Minimum FICO score: 600
  • Minimum annual income: N/A
  • Loan amounts: $1,000 to $40,000
  • Loan terms: three and five years
  • Interest rates: fixed
  • Credit check: soft pull to get a rate estimate
  • Fees: origination fee of 1% to 6%

7. Avant

If you’re concerned about your credit score, Avant might be able to help. Avant is known for its accessible debt consolidation loans.

Despite careful planning, TD Bank fumbles online banking upgrade (American Banker), Rated: A

It’s been more than a week since TD Bank first revealed that its long-planned update to its online and mobile banking systems had run into technical difficulties, and many customer are still unable to access their accounts.

A bank spokesman said Tuesday that while the company is making progress on fixing the glitch, he acknowledged that a number of its customers are still unable to use mobile or online platforms to check their accounts, transfer funds or pay bills.

Scott Sanborn Joins LendIt Fintech USA 2018 As Commencement Keynote Speaker (PR Newswire), Rated: A

LendIt Fintech, the world’s leading event in financial services innovation, announced today that Scott Sanborn, LendingClub (NYSE: LC) CEO, will open this year’s conference in San Francisco, the home of technology innovation, with a plea to refocus industry efforts on solving the financial problems of everyday Americans in an increasingly divided nation. From April 9-11, the world’s most prominent and emerging fintech CEOs will gather at Moscone Center to focus on the hot-button topics and issues exploring the future of finance.

Here’s another way Amazon and banks are collaborating (American Banker), Rated: A

SunTrust Banks, Ally Ventures — the strategic investment arm of Ally Financial — the Amazon Alexa Fund and others have raised $16 million in a new round of funding for Greenlight Financial Technology, which makes “smart” debit cards aimed at instilling sound financial habits in kids, teens and college students, the parties announced Wednesday.

ORDER UNDER SECTION 8(f) OF THE INVESTMENT COMPANY ACT OF 1940 DECLARING APPLICANT HAS CEASED TO BE AN INVESTMENT COMPANY (SEC), Rated: A

PROSPECT MARKETPLACE :
LENDING CORPORATION :
10 East 40th Street, 42d Floor :
New York, New York 10016

Above named applicant filed an application on January 4, 2018, and an amendment filed January11, 2018, requesting an order under section 8(f) of the Act declaring that it has ceased to be an investment company.

The matter has been considered and it is found, on the basis of the information set forth in the
application, as amended, that applicant has ceased to be an investment company.

Research shows first-time home buying in Sacramento is tough (ABC10), Rated: A

new study by LendingTree, a leading online loan marketplace, ranks the nation’s 100 largest cities to determine the best options for first-time homebuyers.

The worst cities for first-time homebuyers:

  1. Denver
  2. New York City
  3. San Francisco
  4. Austin, Texas
  5. Las Vegas
  6. Los Angeles
  7. Oxnard, Calif.
  8. Boston
  9. Sacramento, Calif.
  10. Miami

The best cities for first-time homebuyers:

  1. Little Rock, Ark.
  2. Birmingham, Ala.
  3. Grand Rapids, Mich.
  4. Youngstown, Ohio
  5. Winston, N.C.
  6. Dayton, Ohio
  7. Indianapolis
  8. Scranton, PA
  9. Pittsburgh
  10. Cincinnati

KBSDirect.com Launches $ 1 Billion No-Load Real Estate Fund on CrowdStreet Marketplace (PR Newswire), Rated: A

CrowdStreet, provider of the leading commercial real estate investment platform for investor acquisition and relationship management, today announced KBS, one of the largest and most respected commercial real estate companies in the United States, has launched a new $1 billion “no load” and no upfront commission growth and income properties fund on the CrowdStreet Marketplace. KBS is offering its new fund, the KBS Growth & Income Fund, through both the CrowdStreet Marketplace and its own direct-to-investor platform at KBSDirect.com, which is powered by CrowdStreet technology. KBS is taking this unique omnichannel marketing approach to provide access and engage a wider array of accredited investors seeking institutional-quality investment opportunities managed by leading professionals.

ArborCrowd Offers Investors Equity in New Multifamily Real Estate Deal (PR Newswire), Rated: B

ArborCrowd, an online commercial real estate crowdfunding company, announced the opportunity for investors to own equity interest in a multifamily property with tremendous upside potential. Tower on Ryan Park (the Property) is a 141-unit, high-rise property located in downtown Mobile, AL.

The total capitalization of the deal is $12.7 million, and ArborCrowd is raising $2.6 million of equity. The Property has a targeted 16 percent to 18 percent Internal Rate of Return (IRR) and a projected hold period of three to five years.

StraightUp launches platform for NYC real estate investing (Bankless Times), Rated: A

With the launch of StraightUp, access to high-potential, curated New York residential development projects is available to investors – those who are neither the well-connected and super-rich elite, nor large institutional investors – for the first time. The platform gives investors a new level of access, transparency and opportunity in the unbeatable, but previously unreachable world of New York City development.

NY Fed finds fintech mortgages quicker, less risky than bank loans (The Hill), Rated: A

Mortgage lenders that exclusively use online applications approve loans quicker, experience fewer defaults, encourage more refinancing and respond to demand shifts better than brick-and-mortar rivals, according to a New York Federal Reserve report released Thursday.

Fintech lending has grown annually by 30 percent from $34 billion to $161 billion, 8 percent of the market, in that time, it reported.

Small Business Loans for Women (LendEDU), Rated: A

Investment Opportunities for Women

1. Golden Seeds

If you’re looking for an angel investment firm that focuses on women, consider Golden Seeds, one of the largest and most active early-stage investment firms for women. They focus on B2B and B2C firms in tech, health care, consumer products, and service industries. They look for companies that have a scalable business model and at least one woman in the C-suite.

2. Belle Capital

This early-state angel investment fund focuses on companies in underserved markets. Belle Capital requires that you have at least one female founder in order to qualify and/or that you’re willing to recruit top female talent to your C-suite. They fund digital, mobile, internet, life sciences, medical devices, health IT, CleanTech, and other sectors.

3. Female Founders Fund

As an early-stage investment fund, Female Founders Fund aims to help companies founded by women. The companies must be based on innovative solutions that will better serve customers. The organization focuses on technology that connects buyers and sellers, e-commerce, web-enabled services, and disruptive communities.

4. Women’s Venture Capital Fund II

The Women’s VC Fund II looks to help boost women in business, making investments in early-stage, revenue-generating companies that have the potential for significant growth. It requires that companies are inclusive of women. It focuses on funding companies based on the West Coast that are working on enterprise SaaS, educational technology, and consumer internet solutions.

5. Women’s Startup Lab

If you’re looking for an accelerator to help you succeed, the Women’s Startup Lab can connect you to a group of mentors who are looking to help female-led businesses. The lab boasts a stellar track record with 90 alumnae and $50 million raised for their companies. In return for their assistance, they ask for 3 percent in equity to pay it forward.

U.S. House Passes Bill Supporting Triple-Digit Predatory Lending (South Florida Caribbean News), Rated: A

A bill passed the lower chamber that would render useless state laws in the majority of states, including the 15 states and the District of Columbia where state interest rate limits prevent payday lending. HR 3299, titled the Protecting Consumers’ Access to Credit Act, passed the House on a 245-171 floor vote.

If passed in the Senate and signed into law by President Donald Trump, the measure will preempt state interest rate caps that now limit the annual percentage rates (APRs) on loans to no more than 36 percent. These respective rate caps now save consumers an estimated $2.2 billion in fees every year.

Payday lenders strip $ 50 million per year from Colorado economy (Craig Press), Rated: B

Payday lenders charge Coloradans an average of $119 in fees and interest to borrow $392, with an average annual percentage rate of 129 percent. This removes $50 million per year from the Colorado economy, according a new report released this week by the Center for Responsible Lending.

Sykes Rejoins Chapman, Expands Renewable Energy, Securitization Practices (Monitor Daily), Rated: B

David Sykes rejoined Chapman and Cutler earlier this month as a partner in the San Francisco office, adding to the firm’s renewable energy and securitization practices.

Sykes represents lenders, lessors, issuers and investors in renewable energy and fintech transactions. He has experience in matters involving debt and equity finance transactions (including tax equity transactions), securitizations, joint ventures, asset acquisitions and divestments.

New Castle Chamber to honor Boggs with community service award (Middletown Transcript), Rated: B

Boggs regularly interacts with U.S. financial regulators on matters pertaining to global and mobile payments, marketplace lending, crowdfunding and cryptocurrency. He also represents technology and innovation companies in their public sector outreach relating to data privacy and cybersecurity, e-government, public policy and regulatory compliance.

United Kingdom

P2P default forecasts are rising, but should investors worry? (P2P Finance News), Rated: AAA

Zopa figures show its expected default rate is now higher than at the start of the financial crisis in 2007, at 4.52 per cent for loans granted in 2017 against 2.74 a decade previously, but other platforms have similarly high forecasts.

Lending Works predicted default rates of 3.4 per cent for loans made in 2017, which is more than double the rate when it first started lending in 2014, and up from 3.2 per cent in 2016.

RateSetter (which originates consumer loans as well as business and property loans) indicated that its expected default rate is 3.18 per cent for 2018, the same as last year. This is down from 3.43 per cent in 2016 but its default rate was 1.4 per cent when it first started lending in 2011. It increased to 1.54 per cent in 2013 and 2.43 per cent in 2014 before hitting 3.02 per cent in 2015.

Landbay boss makes case for IFISA (AltFi), Rated: A

Buy-to-let mortgage lender Landbay first launched its ISA just in time for ISA season last year. Now, one year on, CEO John Goodall (pictured) has put forward five reasons for investing in the wrapper.

Those reasons are: it’s tax-free, it offers high interest rates, it offers an alternative means of investing, it offers access to a variety of asset classes, and it’s a source of regular income.

The balancing act in digital bank lending (AltFi), Rated: A

It’s for this reason that more or less every adult in the UK is forced to bin three or four letters a month from their bank offering them a loan or overdraft. In this day and age, users of online banking are just as likely to find themselves having to hide a not-so-surreptitious offer of a pre-approved loan of £20,000, wedged in among the payments on their online statement.

In the new world of digital banking, the want (/the need?) to lend is a source of great embarrassment. Credit is treated as a kind of dirty, best hushed up necessity. Nowhere is this more evident than in the launch of Tandem’s first major product: a credit card.

That card – available in four vibrant colours – carries an APR of 18.9 per cent.

And it’s not just Tandem. Monzo, Starling, Revolut, N26 – they’ve all launched or are thinking about launching a suite of loan options. Revolut partnered with peer-to-peer lender Lending Works to power its consumer credit offering. N26 has teamed up with auxmoney and Younited Credit. They’re all gearing up to lend money but they’re stuck in this weird position where they can’t speak plainly about wanting to lend.

Assetz Capital to host intermediary events (Bridging&Commercial), Rated: B

Assetz Capital has announced dates for its intermediary roadshow and smart lending intermediary event.

The intermediary roadshow will be held at Cedar Court Hotel, Wakefield, on 21st March, while the smart lending intermediary event will take place at Murrayfield Stadium, Edinburgh, on 17th April.

UK Consumer Credit 2017: Forecasts and Future Opportunities (PR Newswire), Rated: A

Rate of growth in consumer credit gross advances, which picked up in 2015, has slowed and year-end figures for 2017 are expected to show growth of around 4.6%. Growth will remain moderate throughout the rest of the forecast period, meaning that gross advances are expected to total of around £329bn by 2021. On the supply side, high incidences of bad debt, tighter lending criteria, and a cautious approach towards unsecured lending among providers and regulators will check the rate of growth of credit supply over the forecast period.

Critical success factors include in this report –
– Retail finance specialists should identify which retail sectors offer the best opportunities for growth, whether due to rising levels of spending or lack of current finance options. Innovation from fintech companies will soon provide small retailers with new financing options, increasing competition in the market. Hence, they should tailor their propositions to meet the needs of customers.
– Partnerships with established firms that have a longstanding reputation will help achieve the much needed scale for P2P platforms to compete.

Moreover, these report offers insight into –
– The key macroeconomic, regulatory, and other factors that will drive the demand for, and supply of, consumer credit over the next five years.
– The outlook for total consumer credit including overdrafts, P2P, motor finance, payday lending, home credit, credit cards, and retail finance.

Scope
– Peer-to-peer (P2P) lending will see double-digit growth up to 2021. The sector will continue to enjoy rapid expansion due to increased consumer awareness and partnerships with other related sectors.
– The motor finance boom has started to decline, with growth falling to a lower level of 3.4% in 2017. New car sales are falling, and the excess of vehicles that will enter the used car market over the next few years will drive down prices. Both trends will dampen demand for credit.
– Payday lending has been severely curtailed by tougher regulation, including strict price caps and comprehensive affordability checks. These measures have significantly reduced the supply of credit and will depress gross lending.

Banks not saying how they’ll support businesses hit by Brexit (The National), Rated: A

Brexit and Scottish Business, from former MPs Michelle Thomson and Roger Mullin of consultancy firm Momentous Change, reveals the concerns of 236 of Scotland’s senior business figures about leaving the EU. The report comes against a backdrop of a collapse in bank net lending. In the final two quarters of 2017, net lending to SMEs across 30 UK banks – 75 per cent of the UK lending market – was dwarfed by that from peer-to-peer lender Funding Circle.

International

 

INVESTORS NEWLY OPTIMISTIC ABOUT HEDGE FUNDS (All About Alpha), Rated: AAA

Deustche Bank recently released its Alternative Investment Survey, the 16th annual.  This year the questionnaires received replies from 436 global hedge fund investors, with assets under management of $2.1 trillion, who shared their insights, sentiments, and allocation plans.

Over the year, the HF industry grew by 6.4%; assets under management reached the record figure $3.21 trillion at year’s end. In last year’s survey, investors’ predictions had fallen a bit short, holding that the year’s end figure would be $3.14 trillion.

For the year to come, respondents are predicting further expansion, and a year’s end AUM of $3.42 trillion.

Half of the respondents expect to increase their own allocation. Another 39% said they will maintain their allocation where it is, so that only 11% plan to reduce it. Last year, only 37% of survey respondents were saying they expected to enhance this sliced of their portfolio, 41% expected to hold to the status quo, and 22% planned to reduce.

Addressing Demand (Medium), Rated: A

While we’ve made industry-leading progress in issuing over $23m in blockchain-backed loans, there is still a demand of over $1.3b in loan requests that we are diligently working to address.

 

Australia

Brokers have ‘key role’ in communicating CCR changes (TheAdviser), Rated: AAA

RateSetter surveyed 1,000 Australian consumers earlier this year and found that 29 per cent of people believe that the comprehensive credit reporting (CCR) changes will affect the way they approach and manage their finances by way of positive behavioural changes such as making payments on time and paying more than the minimum amount on their credit card.

SMEs ‘over-reliant’ on banks, but gradually changing (MyBusiness), Rated: A

The Organisation for Economic Co-operation and Development (OECD) released a new report which found that, although banks still dominate in funding small businesses, new bank lending is declining in a number of countries.

The Scoreboard found a median year-on-year drop of 6.5 per cent in bankruptcies in 2016, following a drop of 6.9 per cent in 2014 and 9.1 per cent in 2015.

The OECD report noted that SMEs accounted for 99.8 per cent of all enterprises in Australia, at just over 2.1 million in 2015/16.

It found that SME loans accounted for around 30 per cent of all outstanding business loans in Australia in 2016 and added that the average interest rate charged to SMEs in Australia between 2013 and 2016 were between 5.1 to 6.5 per cent – nearer the higher end of rates when compared to other OECD countries.

 

 

Brokers urged to help combat fear about CCR (AustralianBroker), Rated: A

Peer-to-peer lender RateSetter called on brokers to help combat misunderstanding and fear about changes to credit reporting. It said yesterday that its research found that only one-third of people have any knowledge of the impending changes to how credit records are shared.

The lender’s research shows that to achieve positive outcomes under comprehensive credit reporting, consumer awareness needs to be significantly improved, given that two-thirds of people (67%) are unaware of these changes.

Crowdfunded neobank receives credit licence (MortgageBusiness), Rated: B

Online lender Xinja is set to target mortgage borrowers in Australia’s capital cities after receiving its Australian credit licence.

The neobank, which launched its equity crowdfunding offer in January 2018, has been granted an Australian credit licence (ACL) from the Australian Securities and Investments Commission (ASIC), which will allow it to use its digital portal to offer home loans to borrowers.

Authors:

George Popescu
Allen Taylor