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Goldman Sachs names Mosaic their P2P lender and hires team

Lending Times Daily News analysis and data for p2p and marketplace lending

Back in June, Goldman Sachs became the first big bank to announce its plans to start its own online lending business.  Since then, we have seen other banks, most notably JP Morgan, also announce plans to get into marketplace lending.  However, JP Morgan is taking the partnership route, by partnering with small business lender OnDeck Capital.  Goldman remains the only large bank to announce plans to start its own platform.

 

Goldman has been keeping its plans under wraps, but some details have been leaked.  The new lending unit, which has been dubbed “Mosaic,” will lend its own money via its wholly-owned banking subsidiary Goldman Sachs Bank USA (“GS Bank”).  In August, GS Bank announced the acquisition of GE Capital Bank’s online deposit platform, acquiring approximately $16 billion of deposits.  Although people familiar with the transaction said that it was unrelated to Mosaic, it would seem that the platform could serve as a cheap source of lending capital for the new online lending unit.  A strong online deposit platform could have synergies with a strong online lending platform.  However, GS Bank already had a large deposit base of its own, with over $89 billion of deposits at the end of June.  With the lending capital available via GS Bank, this new unit could easily dwarf the better-known businesses of Lending Club and Prosper.

 

Although the unit is currently referred to as “Mosaic,” it remains unclear if that will be the actual name of the business when it becomes operational.  It also remains unclear if the business will be marketed as a division of Goldman Sachs.

 

Goldman’s announcement in June was made in conjunction with its hiring of Harit Talwar, a consumer credit executive from Discover Financial Services, who joined Goldman as a partner to lead the new platform.  Since then, Goldman has made several other hires as it continues to recruit marketing professionals, customer service agents, engineers, data scientists, and operations staff.  In addition to recruiting from major credit card firms such as Discover, Citi and American Express, Goldman is also reaching out to employees from other online marketplace lenders, recently reported by several news outlets. Noah Breslow, the CEO of OnDeck, was quoted in the Financial Times as saying “Goldman has been calling [on our] people for some time…they’ve been calling everyone [in the sector].”

 

In addition to Mr. Talwar, the following executives have recently joined Goldman’s consumer lending division (according to their LinkedIn profiles):

Will this lead to more large banks building their own online lending platforms?  Up until now, the involvement of many banks in the space has been limited to buying loans originated on other platforms, such as Lending Club, Prosper or OnDeck.  However, a recent directive from the FDIC will likely make it difficult for banks to continue to acquire loans originated by marketplace lenders.  Specifically, the FDIC issued a letter in November reminding FDIC-supervised institutions of the importance of underwriting and administering purchased credits as if they originated these loans themselves.  This means that banks must perform a complete analysis of collateral and credit risk of each loan or participation and must have a complete understanding of the borrower’s market and industry.  Additionally, the letter states, “This assessment and determination should not be contracted out to a third party.”  Clearly, the FDIC is worried about banks acquiring loans from other originators.  It seems that partnering with existing platforms, like JP Morgan and OnDeck, or building a proprietary platform, like Goldman, will be the clearest path to take should other banks want to enter the space in a meaningful way.

Author : Mark Smith

 

About the author

George Popescu

Serial entrepreneur.

George sold and exited his most successful company, Boston Technologies (BT) group, in 2014. BT was a technology, market maker, high-frequency trading and inter-broker broker-dealer in the FX Spot, precious metals and CFDs space company. George was the Founder and CEO and he boot-strapped from $0 to a $20+ million in revenue without any equity investment. BT has been #1 fastest growing company in Boston in 2011 according to the Boston Business Journal and the only company being in top 10 fastest in 2012-13 as it was #5 in 2012. BT has been on the Inc. 500/5000 list of fastest growing companies in the US for 4 years in a row ( #143, #373, #897 and #1270). After the company sale in July 2014 until February 2015 George was Head-of-Strategy for Currency Mountain ( www.currencymountain.com ), a USD 100 million+ holding company focused on retail and medium institutional currencies, precious metals, stocks, fixed income and commodities businesses.

• Over the last 10 years, George founded 10 companies in online lending, craft beer brewery, exotic sports car rental space, hedge funds, peer-reviewed scientific journal ( Journal of Cellular and Molecular medicine…) and more. George advised 30+ early stage start-ups in different fields. George was also a mentor at MIT’s Venture Mentoring Services and Techstar Fintech in NY.

• Previously George obtained 3 Master's Degrees: a Master's of Science from MIT working on 3D printing, a Master’s in Electrical Engineering and Computer Science from Supelec, France and a Master's in Nanosciences from Paris XI University. Previously he worked as a visiting scientist at MIT in Bio-engineering for 2 years. George had 3 undergrad majors: Maths, Physics and Chemistry. His scientific career led to about 10 publications and patents.

• On the business side, Boston Business Journal has named me in the top 40 under 40 in 2012 in recognition of his business achievements.

• George is originally from Romania and grew up in Paris, France.

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