A legal case initiated by the city of Miami, Florida has reached the Supreme Court; the case (a combination of two earlier cases) claims that banks, including Bank of America and Wells Fargo, are financially liable for a decade of targeting blacks, Latinos and other minorities for loans with risky terms, including prepayment penalties, negative amortization and no documentation; there is concern that the case may be delayed until the Supreme Court regains a tie-breaking ninth Justice, or result in a return to the lower courts. Source
The small business lending approval rate from banks nationwide was 23.5% in October, while support from institutional lenders helped marketplace lending platforms to increase their small business approval rate to 63.1% nationwide, according to data from the Biz2Credit Small Business Lending Index; the economy also has been steadily improving with GDP and jobs increasing; however uncertainty over the election has affected the broad market which has seen nine of the past 10 days reporting losses in the stock market and another recently delayed rate increase from the Federal Reserve; following the election, consumers and businesses will be closely watching the affects on the economy and interest rates specifically as the country's new president influences credit markets, marketplace lending and fintech overall. Source
The financial technology industry has seen enhanced innovation and financial technology adoption over the past eight years; the industry's growth has accelerated as the US economy has emerged from a financial crisis; during Obama's presidency several innovative sub sectors have grown substantially with significant potential still ahead; Orchard notes the industry's expansion in mobile banking, online lending, retail investing, institutional investing and payments; all areas of the industry with significant growth potential and need for support from the country's next president. Source
Forbes interviews Perry Rahbar, CEO of DV01 on his previous experience at Bear Stearns during the mortgage crisis and how that brought him to start his new firm; DV01 provides insight and transparency to portfolios of marketplace lending loans; DV01 has also been asked to participate in Lending Club's securitizations; according to Rahbar, "DV01 helps people get a transparent view of what's going on, what's causing problems and what's performing well. Historically, you couldn't do this in an easy fashion." Source
Thomas Curry, Comptroller of the Currency, gave more insight on the Office of the Comptroller of the Currency's (OCC) plans for fintech regulation at a banking and innovation conference in London; Curry reported that regulation would be consistent with current banking standards, noting in his comments that, "if the OCC decides to grant a national charter in this area, the institution will be held to the same high standards of safety, soundness and fairness that other federally chartered institutions must meet"; the OCC is continuing with its plans for an Innovation Office and Curry said he would be releasing a white paper on fintech innovation. Source
Credible serves as a multi-lender marketplace, primarily for student loan borrowers; Lend Academy interviews Stephen Dash, Credible's CEO in their podcast; Credible has had great success in the market, beginning in 2012 when Stephen Dash moved to the US from Australia; through partnerships with a broad range of lenders, the company provides detailed, customized lending options; in the past year the company has expanded to personal loans and also partnered with Sallie Mae; given the current market environment Stephen Dash says the business will continue focusing primarily on its student loan customers for the near-term with a longer-term continued focus on customer experience and new loan categories. Source
On November 3rd, On Deck Capital, the largest online small business lender in the US, reported its third quarter earnings; Lend Academy provides details of the earnings report in their article; company reported a loss of $16.6 million; it had reported a profit for the same period in 2015; the adjusted loss came to -$0.18 per share, versus Wall Street expectations of -$0.15 per share; originations increased from $590 million in the second quarter to $613 million for the third quarter; company expects full-year revenue of $280 million to $290 million; shares closed at $4.52, down from $9.46 a year ago; last week, it was publicized that Zhengyuan Lu, an executive for investor loan sales, is leaving the firm to join Victory Park Capital. Source
The Bureau of Labor Statistics released its October jobs report; data showed an increase of 161,000 jobs in October with the unemployment rate decreasing to 4.9%; continues positive momentum in the labor market after an increase of 191,000 jobs in September. Source
SoFi has partnered with Fannie Mae to help its customers pay down student loan debt using home equity; already focused on student loans, SoFi's new Student Loan Payoff ReFi will allow homeowners to refinance their home and simultaneously pay student loan debt; with home equity, borrowers can combine their mortgage and student loans to make one loan payment on their debt. Source
Morgan Stanley has upgraded Lending Club's stock to overweight; the stock closed at $4.81 on Tuesday, November 2; analyst, James Faucette, notes the company's new executive leadership and positive capital growth potential for 2017; says the stock could increase to $17; company reports earnings on Monday. Source