Large banks are reporting excess capital of greater than $120 billion and in the current market environment are expected to increase buybacks and dividends for the benefit of shareholders; the increased capital is primarily the result of higher Federal Reserve capital requirements for banks following the financial crisis; the higher requirements have helped to increase banking capital ratios to more than 12% of risk weighted assets from 5.5% in 2009; under the new administration, capital ratios are likely to be lowered resulting in more capital returned to shareholders; the Fed's influence is also trending towards lower capital requirements specifically in their 2017 stress test guidelines and also following the resignation of the Fed's lead supervisor, Dan Tarullo. 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
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
Wave and OnDeck have partnered to offer credit products to small businesses; Wave currently offers small businesses financial tools and software for managing their business; the firm will now offer its clients new credit products through Lending by Wave; with Lending by Wave clients can directly access loans and credit lines from OnDeck through the Wave ecosystem. Source
Newly launched marketplace lender Float is using alternative credit scoring to reach a target market of credit averse borrowers; the firm is seeking to provide credit to millennial borrowers with limited credit history; offering a digital lending solution for balancing customers' finances; the firm offers credit lines ranging from $50 to $1,000 and instead of pulling traditional credit reports for credit underwriting, the firm bases its approval decision from access to a customer's bank account transactions. Source
The Cambridge Center for Alternative Finance (CCAF) has released its first report on the alternative finance market, titled, "Africa & Middle East Alternative Finance Benchmarking Report"; the report was created with support from Energy4Impact, UKAid and CME Group Foundation; for 2015 the report cites growth of 59% and a total market of $242 million; Robert Wardrop, executive director at the CCAF says development trends in Africa and the Middle East had a different focus which was on equity crowdfunding and online micro finance as opposed to consumer and business P2P lending in other global markets. Source
The Online Lending Policy Institute has been formed to provide research and education on fintech and marketplace lending; Federal Reserve Governor Daniel Tarullo has resigned which is favorable for financial services deregulation as Tarullo was a driving force for higher capital standards; the PeerIQ weekly update also provides more details on President Donald Trump's executive order regarding financial services deregulation. Source
Lob is a direct mail marketing company for lenders; in their featured blog post they provide three examples of how companies can benefit from using their services for direct mail marketing; benefits include improved acquisition from personalized attribution marketing, broader capabilities to market to customers based on milestones and events, and an efficient program for tracking compliance notices. Sponsored Blog Post
Jonathan Snyder has developed the Philadelphia Capital Consortium to provide increased capital availability to small businesses; Snyder developed a process that allows Philadelphia small businesses to submit a form which is then sent to the Consortium's lenders; Snyder directs the process and interested lenders respond to the inquiry within 10 days; the Consortium has completed four loans and is currently adding new lenders to its network, including online lender Credibility Capital. Source
Small business marketplace lender Breakout Capital has secured a new revolving credit facility from Drift Capital Partners, LLC; the deal provides $25 million in revolving credit for Breakout Capital with further credit available as the company grows; according to Carl Fairbank, founder and CEO of Breakout Capital, "Drift's facility will further bolster our growth trajectory and enable us to provide tens of millions of dollars or more of additional working capital to small businesses across the country."; Breakout Capital has been an active advocate in the marketplace lending industry; it is a founding member of the Coalition for Responsible Business Finance and is also part of the PLUM Initiative. Source