- Today’s main news: Lending Club originations up 1% in Q4 from Q3 2016, down by 23% against Q4 2015.
- Today’s main analysis: Lendio survey says SMBs split on the perception of Trump presidency.
- Today’s thought-provoking articles: Former FICO chief joins XOR Data Exchange. FCA says the distinction between advice and guidance is ‘grayer’. China outpaces U.S. on mobile payments by 50x.
- LC reports Q4 2016 and full year results. GP:” Lending Club has clearly stabilized, no easy feat. What about back to growth now? All indicators seem in the green to me.”AT: “These results illustrate what one scandal can do to a business. Who knows how long it will take for Lending Club to surpass its initial success? Hopefully, 2017 will see LC make bigger strides.”
- Lendio survey reveals small businesses split on the perception of Trump presidency. AT: “This should come as no surprise. Trump’s candidacy was one of the most controversial in history, and SMBs don’t weigh heavily either as Republican or Democrat, however, small businesses are the backbone of the economy. That’s why this survey is important. A perception can often be real enough that it can impact the economy, so the takeaway here is this: While there are reasons to be optimistic, we can’t be irrational about it.”
- Former FICO chief joins XOR Data Exchange. GP:” Such an addition brings a lot of credibility but mostly connections and friends to the company.”
- Fundrise’s low-fee crowdfunding ‘IPO’ is the largest yet. AT: “I love seeing new records set and old records beat. The trend for crowdfunding platforms to raise new capital by crowdfunding through other platforms is an interesting thing. I can’t wait to see how many more pursue that path.”
- OnDeck Capital says unit amended its existing asset-backed revolving debt facility. GP:” More capital for OnDeck. $50mil is no that much for OnDeck though, it would be better sized if it had another zero.”
- FTC sends 2016 ECOA report to CFPB.
- PeerStreet: Enabling real estate investors to reach previously inaccessible asset classes.
- Altisource continues to expand client base.
- FCA: Distinction between advice and guidance getting ‘grayer’. AT: “So what are they going to do about it?”
- Mobile payments outpace U.S. by 50x. AT: “The U.S. is way behind the rest of the world in mobile payments. Still, an increase of 39% is nothing to sneeze at.”
- United States
- Lending Club Reports Fourth Quarter and Full Year 2016 Results (PR Newswire), Rated: AAA
- New Lendio Survey: Perception of Trump Presidency Split Among Small Businesses (Benzinga), Rated: AAA
- Former FICO chief joins XOR Data Exchange as investor and board strategist (XOR), Rated: A
- Fundrise’s Low-Fee Crowdfunding ‘iPO’ (Investopedia), Rated: A
- On Deck Capital says unit amended its existing asset-backed revolving debt facility (Reuters), Rated: A
- FTC sends 2016 ECOA report to CFPB (JDSupra), Rated: A
- PeerStreet: Enabling Real Estate Investors To Reach Previously Inaccessible Asset Classes (Benzinga), Rated: B
- Altisource Continues to Expand Client Base and Enhance Product Lines to Meet the Needs of Servicers (Altisource), Rated: B
- United Kingdom
- FCA: distinction between advice and guidance becoming ‘greyer’ (Citywire), Rated: AAA
- China FinTech Booms as Mobile Payments Outpace US by 50x (Cryptocoins News), Rated: AAA
- Thailand’s Largest Bank to Launch New FinTech Platform (Cryptocoins News), Rated: AAA
- OJK Disseminates Regulations on Fintech and Pawnshop (Tempo.co), Rated: B
- Middle East
- Arab Financial Services to Host First Annual Middle East & Africa Fintech Forum (Crowdfund Insider), Rated: AAA
Lending Club Reports Fourth Quarter and Full Year 2016 Results (PR Newswire), Rated: AAA
Lending Club (NYSE: LC), the world’s largest online marketplace connecting borrowers and investors, today announced financial results for the fourth quarter and full year ended December 31, 2016, and provided guidance for the first quarter and full year 2017.
Key accomplishments in the fourth quarter across the Lending Club platform include:
- Achieved targeted originations of nearly $2 billion, up 1% compared to third quarter 2016
- Continued the company’s lead as the largest personal loan provider in the U.S. with a borrower base of over 1.8 million individuals
- Lending Club has now facilitated nearly $25 billion in loans since inception
- Ended the year with a servicing portfolio of $11.1 billion, up 24% from the same period last year and delivering $1.8 billion of principal and interest payments to investors throughout the quarter
- Ended 2016 with cash, cash equivalents and securities available for sale totaling $803 million, with no outstanding debt
Originations – Loan originations in the fourth quarter of 2016 were $1.99 billion, up 1% compared to the $1.97 billion we reported in the third quarter of 2016 and down 23% compared to $2.58 billion in the same quarter last year.
New Lendio Survey: Perception of Trump Presidency Split Among Small Businesses (Benzinga), Rated: AAA
Lendio, the nation’s leading marketplace for small business loans, today announced the results of a new survey showing that small business owners’ perception of a Trump presidency is split, with 56 percent of small business owners believing the economy will be worse or the same at the close of Trump’s first term.
The survey of over 330 U.S. small businesses with under 250 employees found that only 27 percent approve of Trump’s performance so far. More specifically, small business owners believe Trump’s recent executive order on business regulations requiring federal agencies to cut two existing regulations for every new one will help their business. According to the survey, 41 percent believe it will help, 28 percent believe it won’t help and 31 percent were neutral.
Despite the majority having a negative economic outlook, small business owners are still optimistic about the state of their own businesses. Forty percent of small business owners believe the Trump presidency will have a positive impact on their business, 33 percent believe it will have a negative impact, and 27 percent are neutral.
To view the full survey results, visit https://www.lendio.com/blog/presidential-survey-summary/.
Larry Rosenberger, former CEO of Fair Isaac Corporation (FICO) and current research fellow, has joined Austin-based Data as a Service (DaaS) provider XOR Data Exchange as an investor and board observer. Rosenberger’s experience and expertise in implementing data and analytical models for the financial services industry is expected to help the FinTech startup continue rapid growth, development and adoption of fraud risk models to protect consumers and businesses from identity theft and data misuse.
The addition comes as part of XOR’s latest funding round, a $2 million extension of its Series A investment, which closed at the start of February. In a press statement, XOR Founder and CEO Mike Cook stated the funding will be used to expand XOR’s fraud and credit risk models nationally.
Rosenberger is well known across the FinTech and financial services industries for his leadership of FICO between 1991 and 1999, during which time FICO credit scores were made available to all three major U.S. credit reporting agencies and adopted as standards by Fannie Mae and Freddie Mac for mortgage lending evaluation. Those scores remain the gold standard in credit risk used by banks, lenders and service providers nationally and abroad. Since his tenure as CEO, Rosenberger led FICO’s research and development efforts for another eight-year stint before taking on his current role as research fellow.
Fundrise’s Low-Fee Crowdfunding ‘iPO’ (Investopedia), Rated: A
Last week Rise Companies Corporation, the owner of the popular real estate crowdfunding platform Fundrise, successfully raised over $14 million in an online equity offering to investors that they are referring to as an Internet Public Offering or “iPO.” The offering, which was exclusively offered to current Fundrise investors, became oversubscribed by as much as 146% within 24 hours of becoming available.
According to Crowdfind Insider, Fundrise’s online offering is the largest one that the internet has seen to date. Previously, the record was held by a British crowdfunding platform by the name of Crowdcube. Last year, Crowdcube raised over £8 million (USD$10 million).
On Deck Capital says unit amended its existing asset-backed revolving debt facility (Reuters), Rated: A
* On Deck Capital – the facility amendment provides for an increase in lenders’ revolving commitment from an aggregate amount of $100 million to $150 million
FTC sends 2016 ECOA report to CFPB (JDSupra), Rated: A
The FTC has sent its annual letter to the CFPB reporting on the FTC’s activities related to compliance with the Equal Credit Opportunity Act and Regulation B.
The FTC has authority to enforce the ECOA and Reg B as to nonbank providers within its jurisdiction.
With respect to research and policy development, the letter discusses the following initiatives:
- Auto survey. In December 2015, the FTC published a notice in the Federal Register seeking comments on its plans to conduct a survey of consumers regarding their experiences in buying and financing automobiles at dealerships.
- Big data report. In January 2016, the FTC issued a report warning that certain uses of big data consisting of consumer information may implicate various federal consumer protection laws. The report focused on big data’s impact on low-income and underserved populations and protected groups and discussed the potential applicability of various laws, including the ECOA, to big data practices and provided a list of ”questions for legal compliance” for companies to consider in light of these laws.
- Fintech forum. In June 2016, the FTC launched a series of forums exploring emerging financial technology and its implications for consumers. The first forum focused on marketplace lending and examined how marketplace lending operates, potential consumer benefits, consumer protection issues, and the potential applicability of various consumer protection laws.
- Report on fraud in African American and Latino communities.
- Interagency fair lending task force.
PeerStreet: Enabling Real Estate Investors To Reach Previously Inaccessible Asset Classes (Benzinga), Rated: B
PeerStreet is a true marketplace, and the company serves several customer bases. At a high-level, there are investors and lenders; PeerStreet investors participate in pieces of loans made available on the platform. They typically include individual accredited investors, RIAs and funds.
There are also institutional investors interested in purchasing loans from PeerStreet. Lenders are PeerStreet’s supply source and this group consists of private lenders across the country financing single-family residential fix-and-flip, buy-to-rent and commercial properties.
Altisource Continues to Expand Client Base and Enhance Product Lines to Meet the Needs of Servicers (Altisource), Rated: B
Altisource Portfolio Solutions S.A. (“Altisource”) (NASDAQ: ASPS), a leading provider of real estate, mortgage and technology services, today announced a specialized Federal Housing Authority (FHA) offering, taking advantage of its end-to-end product suite to assist in improving controls and mitigating risk throughout the lifecycle of servicing an FHA asset.
FHA loans represent a growing share of many Servicers’ portfolios and require specialized processes to comply with complex servicing guidance. The Altisource FHA offering provides servicers the ability to help reduce timelines and increase efficiencies with transparency through a customizable approach. From integrated field services, title services and property repairs to Claims Without Conveyance of Title (CWCOT) Auction Services, the complete suite of products is backed by the power of proprietary data and analytics to help further reduce risk and cost for Servicers.
FCA: distinction between advice and guidance becoming ‘greyer’ (Citywire), Rated: AAA
New technology means it is becoming harder to set a distinction between advice and guidance, according to Financial Conduct Authority (FCA) chairman John Griffith-Jones.
Speaking at a conference in Cambridge, Griffith-Jones (pictured) said the regulator needed to consider its definitions to keep pace with changes in the market.
‘Rules that were designed for the paperwork era do not work necessarily for the online one. The distinction between advice and guidance, once reasonably clear, has become much greyer with the advent of platforms and the potential of robo-advice,’ he said.
China FinTech Booms as Mobile Payments Outpace US by 50x (Cryptocoins News), Rated: AAA
New research has shown that Chinese mobile payments were around 50 times greater than those within the U.S. in 2016, thus illustrating that China’s FinTech market is a strong contender in the market.
Research from iResearch in China has found that Chinese third-party mobile payments more than tripled in 2016 to $5.5 trillion. WeChat Pay and Alipay, operated by Ant Financial, dominated the market. Recent research found that Alipay received the biggest investment in 2016 at $4.5 billion as FinTech funding increased in China.
Whereas, in the U.S., mobile payments increased by 39 percent to $112 billion, according to Forrester Research.
The FinTech market in China is reportedly dominated by two major markets: payments/remittances and insurance. In a December report, it stated that 40 percent of banking services customers rely on FinTech platforms and applications to settle domestic and international payments. A further 35 percent of bank customers are reported to employ smart artificial intelligence FinTech services to handle insurance needs.
The growth of Chinese mobile payments has increased due to the rise in online shopping as the improvement of online financial services.
Thailand’s Largest Bank to Launch New FinTech Platform (Cryptocoins News), Rated: AAA
Thailand’s largest bank by revenue, Kasikornbank Pcl, has unveiled that it is planning to introduce a new FinTech platform by the end of the year as it attempts to prevent fee income from its rival banks.
According to information from the Bank of Thailand, Thai mobile and Internet banking transactions increased by 26 percent between April and September in 2016.
At the end of last month, a new report came out that illustrated that there will be a sweeping adoption of blockchain technology in a number of areas including finance within Thailand by 2018.
In the past, Thailand has been averse to the adoption of bitcoin. So much so, that the Bank of Thailand has issued several statements as to their feelings on the digital currency.
Yet, while the bank has certainly taken a cautionary view of the currency in the past, it seems that the country is keen to embrace its underlying distributed ledger, the blockchain.
OJK Disseminates Regulations on Fintech and Pawnshop (Tempo.co), Rated: B
The Financial Services Authority (OJK) disseminated two regulations on financial technology lending services and on pawnshops on Tuesday, February 14, 2017.
OJK deputy commissioner for non-banking supervision Dumoly F. Pardede, said that the OJK supports the development of financial technology (Fintech) lending services in Indonesia.
OJK hoped that Fintech peer-to-peer (P2P) lending providers would harmonize and accelerate distribution of funds to micro, small and medium enterprises (UMKM) across the country. The P2P lending is a Fintech product that connects micro business owners with investors.
Arab Financial Services to Host First Annual Middle East & Africa Fintech Forum (Crowdfund Insider), Rated: AAA
Payment processing company Arab Financial Services is set to host the first annual Middle East and Africa Fintech Forum. This year’s theme is “Fintech Disruption in the Financial Industry.”
According to Trade Arabia, the event is being sponsored by Bank ABC and Bahrain Economic Development Board (EDB). It will feature various topics, including latest fintech trends and discuss the challenges and opportunities in the fintech sector. The event’s participants will include government officials, regulators, professions and industry experts.