PeerIQ’s weekly update includes a look at recent testimony on capitol hill by Equifax and Janet Yellen’s remarks at an event on reducing regulatory burdens on smaller banks; they also take a deep dive into the recent Navient acquisition of Earnest and how the servicer stacks up to SoFi. Source.
The American Bankers Association released their quarterly delinquency bulletin which shows steady delinquency rates at 1.56%; the 15-year average is 2.16%; Household debt hit a record $12.84 trillion in the second quarter with increases in automobile, mortgage and credit card debt. Source
According to the WSJ, OneMain is looking to sell and is in advanced discussions with multiple parties; the deal could be worth $4 billion or more; Most of OneMain’s personal and car loans are to people with credit scores under 660; the company has 1,700 branches and 2.2 million customers. Source
deBanked reports that Google searches including “cash advance” do not include advertisements when searching; this is likely due to Google clamping down on payday loan advertisements and the term cash advance being related to payday loans; Merchant cash advances however are for businesses, making this a possible unintended consequence on the clamp down of payday loan ads. Source
The new rule forces lenders to to assess whether borrowers can repay the loans and limits rollovers, where customers take out new loans to repay old ones; the new rule is likely to face legal challenges and is primarily focused on loans under 45 days. Source
As more banks start utilizing new technologies like artificial intelligence and blockchain current employees are beginning to worry about their future; Lyn Hall-Fore, U.S. director of BSA/AML compliance tells American Banker, “We told them, this is to make your job easier and better and give you more capacity to think, but still meet your production quotas”; finding the right balance will be a struggle as banks continue to innovate. Source
FinLab aims to help fintech startups that are helping American consumers; it is funded through a five-year grant from JPMorgan; in total 26 companies have worked or are working with Finlab; TechCrunch profiles how the innovation lab works which includes programs to help startups understand how the banking industry works and meetings in Washington with regulators. Source
An opinion piece in American Banker highlights the challenges the marketplace lending industry faced in 2016; Alenka Grealish, a senior analyst at Celent believes that we will see consolidation and more partnerships in the remainder of 2017 and into 2018; discusses the advantages and challenges both fintechs and banks have and what may happen in a downturn. Source
Student loan servicer Navient has acquired fintech firm Earnest for $155mn; the motivation behind the deal will pave the way for Navient to enter the lending business; “We’re looking to be the major player in the student loan refi space,” said Navient CEO Jack Remondi in an interview with the WSJ. Source.
Finastra, R3 and seven global banks are teaming up to build a blockchain based marketplace for syndicated loans; banks include BNP Paribas, BNY Mellon, HSBC, ING and State Street; Fusion LenderComm, which uses R3's Corda platform, will be able to handle real-time credit agreements, accrual balances, position information and transaction data. Source.