The Federal Open Market Committee (FOMC) ended its two-day policy meeting on Wednesday and released an afternoon announcement reporting no change to the central bank borrowing rate which will remain at 0.25% to 0.50%; as expected the FOMC's statement did indicate that a rate hike in December was likely with new language saying the 2% inflation objective is near and that the Fed only needs "some further evidence" of economic progress for a rate increase; globally the US is one of few central banks tightening monetary policy; many are easing with negative rates; Japan's central bank borrowing rate is -0.10% and the ECB central bank borrowing rate is at 0% for the Eurozone; the Bank of England will be meeting on Thursday and is expected to keep its rate unchanged with further easing in 2017. Source
American Banker speculates on what President-elect Donald Trump will do with the CFPB, which has enhanced consumer financial protections in recent years; Trump has not been definitive but rather generally against current levels of financial regulation; in October, the US Court of Appeals for DC found that the CFPB's director could be unilaterally replaced by the US President; the agency has until November 25 to appeal; if they should lose the appeal, the publication poses options for the incoming President of (a) pressuring current Director Cordray to resign then replacing him with someone who will drop the legal appeal, or (b) have Republican lawmakers in the next congressional session replace the single director oversight with a five-member commission and subject the CFPB to Congressional appropriations review. Source
As part of their SoFi ReFi program, SoFi will now offer a six-month grace period for new graduates; typically refinancing student debt has meant that graduates must give up their grace period on loans. Source
Earlier this week, the UK launched its bank referral scheme to help extend credit to small businesses not funded by nine of the UK's largest banks; it seems that UK banks outside of the UK consortium are also increasing their efforts to provide alternative options for business borrowers; this week NatWest announced it has added iwoca to its alternative lending panel, Capital Connections. Source
PeerIQ provides insight on Cross River Bank and its $28 million investment from venture capitalists; the deal highlights Cross River Bank’s partnerships with marketplace lenders and provides a leading example for how banks can seek to gain from online lenders while also mitigating true lender risk; Cross River Bank likely to set a precedent for banking investment in MPL loans; success with marketplace lending partnerships has helped it to achieve a return on equity of 26.5% versus 9.8% for FDIC-insured institutions. Source
Legion Capital, a venture capital and advisory firm, has launched a subsidiary called Stage 1 Funding, LLC; the new firm will look to address the demand for small business finance; Joseph B. Hilton of the Hilton Hotel Family will serve as President and they will focus on accounts receivable finance, equipment finance and venture debt or equity. Source