Lots of regulatory news this week and, of course, we have just started fintech earnings season. Leading my top 10 this week are the CFPB director testifying before both the Senate and House, Fidelity will allow bitcoin in 401(k) plans, Robinhood had a bad week, the OCC is talking stablecoins and Goldman created a lending facility backed by bitcoin. Here are what I consider to be the top ten fintech news stories of the past week.
In fiery Senate hearing, U.S. CFPB chief focuses on Big Tech influence, competition from Reuters – CFPB Director Rohit Chopra testified before both the Senate and the House this week where he discussed open banking, the CARD Act, algorithmic lending, big tech, competition and fining repeat offenders.
Fidelity to Allow Retirement Savers to Put Bitcoin in 401(k) Accounts from The Wall Street Journal – Fidelity manages the retirement plans for 23,000 companies representing 20 million people with $2.7 trillion under management. Soon, these people will be able to allocate up to 20% of their contributions to bitcoin. Other digital assets will likely be made available in the future.
Robinhood cuts nine percent of workers from LendIt Fintech News – It was not a good week for Robinhood. After going on a hiring spree during the pandemic the music stopped as the company announced this week that they are letting go 9% of their workers. They also had a pretty miserable earnings report with a 43% decline in revenue year over year.
Acting OCC comptroller calls for standards on stablecoins from Cointelegraph – The acting head of the OCC, Michael Hsu, said this week that the government should work with industry and academia to create standards for stablecoins. Hsu said that stablecoins lacked shared standards and were not interoperable and that needed to change.
Goldman Offers Its First Bitcoin-Backed Loan in Crypto Push from Bloomberg – While we don’t know the details it was revealed this week that Goldman Sachs offered its very first lending facility that used bitcoin as the collateral. Other banks have done this already but it is a first for the venerable investment bank.
Starling bags £130.5m from existing investors to build “war chest” for acquisitions from AltFi – Leading UK digital bank Starling has raised another funding round, this one just from existing investors to the tune of £130.5m at a £2.5b valuation as they look to build a war chest for acquisitions.
CFPB Dusts off Old Rule to Investigate FinTech from PYMNTS.com – The CFPB was in the news again this week with Director Chopra saying that the Bureau will be “utilizing a dormant authority to hold nonbanks to the same standards that banks are held to”. He did reference a specific company or even a product but said this new authority will allow the Bureau to be agile and supervise fast-growing companies.
Nonbank jumps at rare chance to get into SBA 7(a) lending from American Banker – Lendistry is a California CDFI focused on lending money to minority-owned businesses. They are now the proud owner of an SBA 7(a) lending license, one of only 14 non-banks that can participate in the most popular SBA lending program.
LendingClub earnings beat Q1 expectations from LendIt Fintech News – LendingClub also reported earnings this week and they had another great quarter. Revenue was up 174% year over year, originations up 117%. On the other side of their business deposits grew to $4 billion, up 27% from the previous quarter.
Personal Loans Are Back After an Early Pandemic Slump from The Wall Street Journal – Personal loans are hot. Consumers took out $222 billion in personal loans in 2021, a 31% increase over the previous year and 22% up over 2019. This is why every fintech lender CEO I have spoken with recently is sanguine about their business.
Every Thursday, the LendIt Fintech News team and a special guest discuss the news of the week live on LendIt TV, YouTube, LinkedIn, and Twitter. We have now made the show available in podcast format – click on the audio player below.
