While the passage of the JOBS Act in 2012 helped to spur crowdfunding into an exciting industry, questions have continued surrounding investor protections and the legitimacy of companies using this method to raise capital; SeedInvest CEO Ryan Feit recently told the New York Times: "I'm legitimately concerned that a lot of people are going to be losing money; investing in startups is really risky, and it's very different than buying a used couch. We definitely do not think you should treat it like Craigslist."; investors don't necessarily understand the investment and companies are not following the rules fully, causing many in the industry to legitimately worry about the way forward. Source
The Consumer Financial Protection Bureau was approved to investigate the activities of Indian tribe lenders; the online lenders under investigation will be Great Plains Lending, MobiLoans and Plain Green; the lenders are providing credit to a range of borrowers outside of their Indian tribes; they are claiming sovereign immunity because of their status as Indian tribes. Source
Online lender Elevate has released customer progression milestones showing improved credit scores and rate eligibility; 55,000 customers on the platform have improved their credit scores and 20,000 customers can now receive a lower borrowing rate; Elevate's unique RISE credit product facilitates credit scoring improvement by educating customers on their personal financial credit and offering subsequent loans at reduced rates of up to 50% for qualified borrowers. Source
Morgan Stanley Analyst James Faucette says Lending Club has upside potential of 35%; cites institutional investment, loan growth at moderate but sustained pace and industry contacts reporting no deterioration in reinvestment or retention rates; targets the stock at $8; the company will announce Q4 and year-end earnings on February 14th. Source
After substantial growth in 2016, Money360 has expanded its team by adding two new divisions and directors; David Christensen will lead the Northwest region and Kenneth Wood will lead the Northeast region; in December the company reported a record month of lending with $35 million in loans; in the first few months of 2017 it expects to report cumulative lending of over $200 million. Source
AutoFi and Ford have announced a new partnership that will make financing and buying a car available online; Ford will use the AutoFi platform for sales from its Ricart Ford dealership in Groveport, Ohio with expansion planned for dealerships throughout the United States; through the AutoFi platform customers can select a vehicle, access Ford Credit for a financing decision and terms, customize their vehicle protection products, review their paperwork, and schedule a time to complete the sale and pick up the vehicle; Ford Credit also made an equity investment in AutoFi. Source
In December the Office of the Comptroller of the Currency (OCC) released its proposal for a fintech charter with an open comment period until January 15; the OCC has received numerous comments which can be found here; Lend Academy and LendIt submitted a response in favor of the fintech charter; their response outlines the difficulties online lenders have in complying with different rules in each of the 50 states; suggests nationalization of regulation would make platform operations more efficient and help the industry to broaden the benefits it can offer to financial inclusion and other nationwide initiatives. Source
An opinion editorial in American Banker makes the case for eliminating the Consumer Financial Protection Bureau; says the agency provides for unnecessary expansion of federal regulatory power; suggests a return to segregated oversight; provides a list of overreaching executive powers in addition to its recent unconstitutional ruling. Source
Over $300 million has been invested on RealtyShares into residential and commercial real estate projects; the company crossed $200 million in September 2016; individual investors can invest a minimum of $5,000 per project; the company also has multi-billion dollar institutions participating on the platform; to date 550 real estate deals have been done across 1,000 properties, spanning 35 states; RealtyShares has a network of 38,000 accredited investors. Source