Every year Inc. pulls together a list of the top 5000 fastest growing private companies in the United States. This...
Initial results from a congressional investigation shows that minority business owners are more likely to seek a loan from a fintech firm and potentially pay a higher fee; Rep. Emanuel Cleaver (D-Mo.) wants to further explore whether or not these lenders are aggressively targeting these borrowers and offering higher rates; the investigation has focused on online lenders and their underwriting practices for emerging minority owned businesses. Source.
The report will be released on a quarterly basis going forward and will look to cover credit performance trends; highlights of the report include continued credit re-normalization across all major lending groups and consumer installment lenders are not anticipating an increase in loss rates; they also cover the shift in the competitive landscape where more banks are investing heavily in tech and that the US consumer is quite healthy right now. Source.
Junheng Li, founder of an independent research firm focused on Chinese companies provides an update on lending in China with the recent news of tightening regulation. Source
While hosting their first investor day the online lender again cut guidance for profits and shares fell to record lows; “The last 18 months have been among the most challenging of my career, but my conviction has never wavered: consumer credit is a data problem that a technology-driven marketplace is well positioned to solve,” CEO Scott Sanborn said at the investor day; Lending Club has had is share of issues and new entrants like Marcus have begun to crowd the market; not all investors are put off by the news, Chinese investor Shanda said he was keeping the faith in the lender as they recently made a big investment. Source.
Once seen as a niche segment of finance online lenders are now originating billions in loans each year; the bigger they get the questions start to arise if they can handle an economic downturn and are their underwriting models good enough; American Banker digs into the overall industry by looking at securitization growth, whether or not traditional banking is dead and more. Source.
According to data from TransUnion, financial technology groups originated $15 billion of personal loans in the first half of 2017; this represents nearly a third of the total US market for new personal loans; John Wirth, vice-president of fintech strategy at TransUnions stated, "fintech business model appears to be working nicely. Their use of the latest technology . . . has likely helped them become leaders."; Source
After considerable outcry the Cleveland Fed has removed their study about online lending; “In light of the comments received, the authors are currently revising their paper to further clarify the data sample they used in the study,” Cleveland Fed spokesman Tim Dewald said in an email to American Banker; they plan to post a new version of the paper after completing significant revisions. Lend Academy also covered the removal of the report after posting about the release last week. Source.
We are winding down the year and approaching the time when the news cycle starts slowing down and everyone begins...
Online lender SoFi closed their 12th securities for $769mn of private student loan notes; total issuance in 2017 reached $6.9bn which was up from $4.2bn in 2016; the deal featured 38 investors and joint lead managers were Morgan Stanley, Bank of America Merrill Lynch, Credit Suisse and Goldman Sachs; SoFi is in the top ten of ABS issuance in 2017 as they continue to utilize the markets better than any other online lender. Source.