The US marketplace lending industry has matured with a number of self-regulating industry associations however the evolution of the industry and its integration into mainstream financial services has brought about increased regulatory attention which was one prominent topic for discussion at LendIt USA; HousingWire details the keynote speeches from Thomas Curry and Patrick McHenry also discussing insight from Amias Gerety; Richard Cordray from the Consumer Financial Protection Bureau was also a featured keynote speaker discussing government regulatory efforts pertaining to the industry. Source
Sources have reported to Crowdfund Insider that the platform has shut down; the online lender was providing lines of credit for up to $1,000; it last raised $3 million in February 2017. Source
Clarity Services is a leading alternative credit data provider; the firm has published a new report titled, "2017 Subprime Lending Trends Insights into Consumers and the Industry" which analyzes alternative credit data from the firm's database of approximately 60 million unique consumer identities; provides details on consumer trends and the financial behavior of this market group. Source
Alternative credit data company VerumView has developed a product primarily focused on capturing data surrounding an end-user's email; it's built on an API-based know your customer service (KYC) and helps to provide credit decisions on thin file borrowers; the system can service the following: identity verification, fraud detection, KYC, anti-money laundering, TF prevention, loan and insurance underwriting, credit and affordability scoring, competitive analysis and targeted marketing. Source
Dave Girouard is the founder and CEO of Upstart; Girouard spent almost his entire career working for tech firms including Apple and Google and a lot of Upstart's team actually comes from Google; given that they lean heavier towards the 'tech' side of fintech, Girouard has a unique perspective; shares the general trend of software disrupting every business and that every business will become a tech business; discusses the history of marketplace lending, attributes of a marketplace and the evolution of the marketplaces; reports on how artificial intelligence and machine learning can help in a number of ways including creation of real time analysis, development of customized credit scoring, expanded access to credit through broader underwriting variables and faster processing; also discusses some of the challenges that currently keep machine learning solutions from the mainstream including adverse selection, loan stacking, fraud and regulatory concerns; ends with the benefits of alternative machine learning technology including more inclusion, lower rates, lower costs and greater financial support for consumers. Source
Loan servicing company Navient has marketed support for student loan borrowers as part of its customer service strategy however its defense to a court case says the opposite; the company is being sued by the Consumer Financial Protection Bureau (CFPB) for not instituting customer service that matches its customer commitments; the CFPB's main argument is that Navient did not take into account the best interest of borrowers, specifically directing struggling borrowers into payment plans versus capped payment solutions because of the time intensive registration of the latter option; Navient blames a lack of compensation from clients such as the US Education Department for the company's service constraints; the Education Department finds no merit in Navient's defense and the CFPB has data that estimates Navient's service caused borrowers to pay an additional $4 billion in interest charges; Navient has evidence citing a significant number of borrowers in income-repayment plans and has solid arguments including that the federal law does not require servicers to counsel customers on their repayment options. Source
In an opinion piece on American Banker, General Counsel of US Century Bank argues that community banks could gain a lot from using blockchain technology; unlike big banks they don't have resources to test ideas and spend millions of dollars; pooling their resources or joining a consortium would be the best way forward to begin to test usages of the technology; engaging with the big four bank vendors is another idea; FIS, Fiserv, Jack Henry and D+H provide the core banking software at most banks and ensuring a dialogue with them is crucial; increased efficiency can help community banks stay competitive in an environment that is becoming more crowded by the day. Source
Today, Prosper appointed Usama Ashraf as its new CFO; Ashraf will also oversee the capital markets side of the business to bring in new investors; Ashraf has more than 18 years experience in corporate finance and capital markets; recent positions include being the deputy chief financial officer and treasurer at Annaly Capital Management and corporate treasurer at USAA; David Kimball, Prosper's CEO stated: "We're thrilled to have someone with Usama's experience and track record in finance and global capital markets join our team. Usama will be instrumental in bringing new institutional investors onto the Prosper platform, including banks, as we continue to grow the platform in 2017." Source
In September, Comptroller of the Currency Thomas Curry discussed his proposal for fintech regulation which he said would likely include a fintech charter; on Friday, Thomas Curry is expected to announce his plans for the fintech charter; potential provisions to be included with the fintech charter announcement include receivership powers which would provide support from the government if capital funding fails. Source
CEO Tom Burnside from LendingPoint provides his insight on how to be successful in the online lending business in this featured blog post; gives five factors for success; Tom Burnside is optimistic about the industry's growth and potential as well as the success of LendingPoint; in 2016, LendingPoint gained steadily as it continued to focus on providing credit for underserved consumers through fair credit underwriting. Sponsored Blog Post