Multi-lending platform Alternative Business Funding (ABF) will become the fourth alternative finance business to be involved in the UK's bank referral scheme; the bank referral scheme began in November 2016 and has been reporting success with over 8,000 SMEs being referred to alternative funding sources; the other three businesses in the referral scheme network include Funding Options, Funding Xchange and Bizfitech. Source
Biz2Credit has announced a new partnership with Tradeshift for expanded small business access to capital; Tradeshift is a cloud-based business procurement network supporting over 800,000 businesses; companies that use Tradeshift will gain access to the Biz2Credit platform for financing options; Biz2Credit says the partnership will help Tradeshift's clients secure financing more quickly and easily. Source
Avant and Marlette Funding are battling state law in Colorado; the state has a 12% rate cap for consumer loans and both lenders advertise loans that exceed that limit; both partner banks that work with the online lenders have filed lawsuits against Colorado claiming the interest rates they charge are acceptable by federal law because of the charters they hold from their state. Source
Specialist fund manager Fintex Capital has hired Alan Margolis to expand its business with a new real estate lending strategy; the firm is active in the marketplace lending sector working primarily with Auxmoney; the new real estate business will invest in short-term and medium-term loans from real estate lenders and platforms. Source
Deutsche Bank has reported increased defaults in commercial mortgage backed bonds tied to malls and retail stores that they underwrote in 2012 and 2013; the bank is suggesting investors short the BBB- rated portion of the 2012 Markit CMBX price index, known as the series 6, which they say is tied to these investments; their analysis sees these bonds with pre-crisis attributes which successful investors shorted to avoid losses. Source
Manatt provides an overview of some of the comments received by the OCC on the proposed fintech charter; the New York Department of Financial Services was critical of the charter; the American Bankers Association is supportive of the charter "...as long as existing rules and oversight are applied consistent with those for any national bank"; the Financial Services Roundtable also spoke in favor of the charter, commending the OCC for its development of the proposal; also highlighted are responses from the Consumer Bankers Association and the Independent Community Bankers of America. Source
DirectMoney, an online lender in Australia, has received institutional funding to help it continue originating loans for the next 12-24 months; the funding follows the appointment of new CEO, Anthony Nantes on October 5; full terms of the deal and details on the institutional partnership were not disclosed by the source and appear to be available only to the platform's shareholders. Source
Lisa Servon worked at a check cashing store to identify its benefits and whether or not the financial system should direct consumers to banking services which have previously been cited as less expensive and more efficient; in her experience at RiteCheck Cashing, Servon found three factors that influenced the use of check cashers by the underbanked; costs were lower in comparison to the fees and charges from using a bank; pricing transparency was more clearly provided for check cashing services; many customers also reported better service from check cashing tellers than bank representatives; Servon has published a book titled "The Unbanking of America: How the New Middle Class Survives" which provides full details on the benefits of using check cashing services. Source
Orchard's January 13 Snapshot highlights Funding Circle's new investments, Marcus and final comments on the Office of the Comptroller of the Currency's fintech charter proposal; in publicly traded marketplace lending stocks OnDeck led returns with a monthly return of 14.12% followed by Square with a monthly return of 4.76%; in UK listed funds the P2P Global Investment Fund led monthly returns with a gain of 4.08%; in the US the RiverNorth Marketplace Lending Fund reported a monthly return of -1.02%. Source
Marketplace lending originations have been increasing significantly in the US and China however in 2016 both countries saw a number of challenges influencing the market and increasing risk; Moody's analyzes market similarities and differences in the two countries; reports on the variance in lending model structuring; notes that US marketplace lenders are more deeply integrated with partner-bank relationships; while structuring and partnerships vary considerably between the two countries, there are similarities, including reliance on big data, lack of credit cycle testing and ongoing development of regulatory standards. Source