The CEO and Founder of FS Card talks about the challenges of creating a new credit card company for the underserved. Source
Elevate's Center for the New Middle Class has released a study showing subprime consumers are limited in their ability to utilize credit balances or borrow from their social networks; the Center's study reports 70% of nonprime Americans couldn't cover an urgent expense of $500 or more with their savings and 64% wouldn't be able to borrow from friends and family; the Center's study amplifies the need for solutions targeting nonprime borrowers; Elevate's Center for the New Middle Class is currently undergoing research efforts to support nonprime credit access and personal financial management efficiencies. Source
Alternative credit underwriting and new data solutions for broadening credit underwriting have been emerging themes in recent quarters; the Consumer Financial Protection Bureau is currently researching alternative data underwriting and many fintech companies are developing new solutions for broadening credit availability and reaching more thin file borrowers; Sasha Orloff from LendUp discusses some of the important factors for consideration in broadening credit availability in his presentation at LendIt USA 2016 highlighting some of the initiatives that are currently developing in today's market. Source
One of the companies the LendIt Fintech team has always held in high regard is LendUp. They are tackling a...
In November 2016 the New York Fed reported on an increase in subprime auto loan delinquencies putting the sector on watch; a report from Fitch Ratings is now showing continued deterioration in the sector during the second half of 2016 and Mizuho is reporting subprime auto loan loss rates increased to 9.1% in January 2017 from 7.9% in January 2016; Fitch reports that 60+ day subprime auto delinquencies increased to nearly 6% in the fourth quarter of 2016. Source
The LendIt Forum replay for Investor Opportunities in Non-Prime Lending is now available; the webinar discussed the non-prime investment space including details on the profile of non-prime investors and the returns investors can expect from this category; speakers included James Zhang from NerdWallet, Aaron Peck from Monroe Capital and Tim Ranney from Clarity Services. Source
The ranks of thin file consumers continues to grow in this country. According to Experian these consumers now number 25% of...
LendIt will be hosting a webinar today at 2:00 PM EST; the Lendit Forum will feature Aaron Peck from Monroe Capital and Tim Ranney from Clarity Services; the speakers will discuss the profile of non-prime borrowers and where the best investments are in the non-prime space; other topics will include how alternative data can be used to better assess the borrower's risk, interest rates for non-prime borrowers and the types of return investors can get when making this investment; register here and join the webinar today. Source
According to data from Fitch Ratings delinquency rates for subprime auto loans are at 5.8 percent, higher than the financial...
TechCrunch analyzes rates at marketplace lending platforms, identifying a trend towards increased delinquencies and borrowing rates for lower credit quality borrowers; platforms have been increasing rates for lower credit quality consumers to potentially offset some of the higher risk of defaults; analysts have speculated that the changes occurring in the lower credit quality categories could be a sign of recession however other economic factors appear to be stable; TechCrunch identifies a significant change occurring in the labor market that could be influential for borrowers over the long term; the automation of jobs is affecting the labor market and the result could disrupt a number of historically stable industries while also changing the tech industry substantially. Source