- Today’s main news: SoFi among largest mortgage originators. SoFi Superbowl ad caused 100x in traffic. Prosper launches seventh-generation credit model. AssetAvenue stops originating. XOR Data Exchange raises $2mil
- Today’s main analysis: Comments on OCC National FinTech Charter
- Today’s thought-provoking articles: D+H launches auto lending platform.
- Fitch adds SoFi to originator assessment list. GP:” To me the interesting news here is that SoFi is among the top retail mortgage originators. One usually thinks of SoFi as a student loan company. Now we should think of them as a two-headed … rocket?” AT: “This signifies more than the alternative lending industry getting mainstreamed. It could actually be evidence that SoFi itself has crossed over into traditional finance.”
- Proposed OCC charter comments & feedback. GP:” I believe most of the comment are encouraging and positive. This OCC charter is needed.” AT: “The comments from industry insiders and top influencers are instructive. It seems the alt lending climate is ripe for regulation, but the right kind of regulation.”
- Prosper launches seventh-generation credit model. GP:” It is normal to see lenders modify and update their lending models. As the borrower population changes regularly as a function of the marketing channels the models also need to keep being updated.”
- Wealthfront adds automated financial planning tool. AT: “This is interesting following the news of rival Betterment announcing it will add human advisors to its robo-advice model.”
- Dead end for AssetAvenue? GP:” Finding lending capital and borrowers in a competitive space is difficult and one needs a real differentiation in product, team, market, technology, or something else.”
- SoFi, et. al. bet on Super Bowl overtime ads. GP:” It sound to me like a free option from Fox. Why wouldn’t you buy this? Somebody at FOX messed up. ” AT: “This was a huge gamble that paid off for SoFi. I applaud their ‘thinking outside the dome’ aproach to mainstream advertising.”
- James Hobson to lead Attune. GP:” Attune is apartnership of AIG , Two Sigma and Hamilton. He will be CEO. Impressive !
- XOR Data Exchange closes $2M Series A extension round. GP:” It validates investor demand and therefore a perceived company value/opportunity. Congratulations to XOR Data Exchange.”
- Philly Fed president says regulation is key to protecting FinTech innovation. AT: “Of course, he doesn’t have a hand in policy-making, so it’s just one voice in the wind.”
- Credit Peers launches property finance P2p. AT: “Another innovative advancement that encroaches on the protected territory of legacy institutions.”
- Specialist fund manager expands into real estate.
- Assetz Capital plans to triple lending.
- Serial entrepreneurs aim to save Japan with crowdfunding. GP:” Japan needs more children. For more children Japanese moms need, like in France for example, 3-year of paid leave per child and families with children need a realistic financial incentive from the government.”
- United States
- Fitch adds SoFi to its originator assessment list (HousingWire), Rated: AAA
- Proposed OCC National Fintech Charter Comments & Feedback (Crowdfund Insider), Rated: AAA
- Prosper Launches Seventh-Generation Credit Model (Prosper Email), Rated: AAA
- Wealthfront Adds Automated Financial Planning Tool (Financial Advisor IQ), Rated: A
- Dead End for AssetAvenue? (Crowdfund Insider), Rated: A
- Four Advertisers Bet on Super Bowl Overtime and Won Big (The Wall Street Journal), Rated: A
- James Hobson To Lead Attune (Yahoo! Finance), Rated: A
- XOR Data Exchange closes $ 2M Series A Extension (XOR Data Exchange Email), Rated: A
- Philadelphia Fed President Says Regulation is Key to Protecting Fintech Innovation (Crowdfund Insider), Rated: A
- United Kingdom
- Credit Peers launches property finance P2P (Finextra), Rated: AAA
- Specialist fund manager with marketplace lending focus to expand into UK real estate (altfi), Rated: A
- Peer-to-peer platform plans to treble lending (Bridging&Commercial), Rated: A
- D+H Launches First Major Automotive Lender on Cloud-Based Search, Registry Solution (MarketWatch), Rated: AAA
- 11 Fintech Companies in UK’s Trade Delegation to Australia & New Zealand (Cryptocoins News), Rated: B
- 4 exits later, these serial entrepreneurs aim to save Japan with crowdfunding (TechinAsia), Rated: A
Fitch adds SoFi to its originator assessment list (HousingWire), Rated: AAA
Fitch Ratings added SoFi, also known as Social Finance, to its special report containing operational assessments of U.S. residential loan aggregators and originators, along with six other entities.
The update to the special report marks the first update since the report was last published in July 2016, bringing the total number of entities covered in the report to 31.
Fitch notes that because SoFi is now one of the largest online residential mortgage retailers, it deemed it prudent to expand its prime coverage by completing an operation risk review of the SoFi residential mortgage origination program.
The report added that as of Sept. 30, 2016, SoFi originated $7.9 billion in student loan refinancing, $3.3 billion in personal loans, and $900 million in prime jumbo mortgage loans.
Proposed OCC National Fintech Charter Comments & Feedback (Crowdfund Insider), Rated: AAA
Last December, the Office of the Comptroller of the Currency (OCC) – part of the Department of Treasury- proposed a “National Bank Charter for Fintech Companies”. The exploration stirred up a hornet’s nest of public officials that were not too pleased the OCC would think outside the box about financial innovation. The deadline for comments was January 15, 2017, and have been made publicly available here.
Below are some anecdotal excerpts from almost 100 comments posted online.
“We applaud the OCC for its work to support this responsible innovation. The proposed special purpose national bank charters present marketplace lending with an additional path to continue to grow and serve consumers and small businesses nationwide more efficiently, fairly, and affordably.”
Richard H. Neiman Head of Regulatory & Government Affairs Lending Club
“As OCC considers the issuance of a special purpose national bank charter, it should, no doubt, consider how the recipient addresses, or plans to address, financial inclusion. The financial inclusion topic is likely unfamiliar and new to many of the firms potentially examining the OCC chartering process. In that regard, firms new and old would benefit from additional guidance on OCC’s working definition of “financial inclusion,” how firms will be scored against OCC’s financial inclusion framework and what those firms should proactively focus on as they approach OCC for initial exploratory conversations.”
Frank Altman & Nick Elders, Community Reinvestment Fund, USA
“We believe that, from a public policy perspective, it is far better for financial services regulators to be active participants than onlookers. Protection of consumers, small businesses, and the financial system itself will be more effective if carried out by supervisors who are fully informed and knowledgeable.”
Prof. Cornelius Hurley, Director, Online Lending Policy Institute Inc.
“By encouraging the growth of responsible, compliant online lending platforms, such as Avant, regulatory agencies can help encourage beneficial competition in both the online and traditional lending industries generally. This will lead to more lending opportunities for borrowers and ultimately lower rates and better pricing for consumers.”
Albert Goldstein, Chief Executive Officer, Avant, Inc.
“As someone without a background in finance what struck me when I began learning about this industry was how inefficient it was. With 50 states, many of which have their own licensing, fee and interest rate requirements, there was no way for an online platform to operate in a uniform manner. With all the advances in technology, I would have thought that financial intermediation would have become many times more efficient.”
Peter Renton, Co-founder and Chairman, Founder and CEO, LendIt Conference LLC Lend Academy LLC
Prosper Launches Seventh-Generation Credit Model (Prosper Email), Rated: AAA
Prosper recently launched their seventh-generation credit model. The net return of the overall book has increased to an estimated 7.86% after the implementation.
Wealthfront Adds Automated Financial Planning Tool (Financial Advisor IQ), Rated: A
While most of its rivals embrace the hybrid model of combining digital advice with human advisors, robo-advice pioneer Wealthfront is bucking the trend by offering even more automation, Reuters writes.
The company is introducing an automated financial planning tool that connects its clients’ outside accounts to track spending and savings to assist with retirement planning, according to the news service. Using a mobile app, clients can then get projections on what they’ll have to save to meet their retirement objectives, Reuters writes.
Dead End for AssetAvenue? (Crowdfund Insider), Rated: A
Crowdfund Insider received a tip this past week that real estate crowdfunding platform AssetAvenue has stopped originating loans. Emails to the company have not been returned, and repeated attempts to contact AssetAvenue by phone have not been successful. Portions of the AssetAvenue site now generate a 404. AssetAvenue social accounts have not been updated in months. A post on BiggerPockets from several months back indicated that a potential borrower had been told they were no doing any funding.
Four Advertisers Bet on Super Bowl Overtime and Won Big (The Wall Street Journal), Rated: A
Before the game, SoFi had inked a deal with Fox to run a Super Bowl ad if — and only if — the matchup went into overtime. No Super Bowl in NFL history had ever extended beyond regulation play.
SoFi said the ad option cost less than half of the roughly $5 million that Fox was charging for 30 seconds of commercial time during the game’s four quarters.
The way these deals work is that brands agree to authorize the ad buys, and Fox runs the ads if the game goes into overtime. If overtime never happens, no money ends up changing hands.
For SoFi, the ad bet caused traffic to spike “100X,” said Ms. Bradford. “It was amazing.
James Hobson To Lead Attune (Yahoo! Finance), Rated: A
Attune, the data-enabled company established by American International Group, Inc. (AIG), Hamilton Insurance Group, Ltd. (“Hamilton”), and affiliates of Two Sigma Investments, LP (“Two Sigma”), today announced that James Hobson, Chief Operating Officer of OnDeck® (ONDK), has accepted an offer to assume the position of Chief Executive Officer.
Mr. Hobson, who will step down from his role at on March 15, will be responsible for achieving Attune’s goal of using data science and advanced technology to streamline the submission and insurance underwriting process to meet the needs of small businesses in the US.
XOR Data Exchange closes $ 2M Series A Extension (XOR Data Exchange Email), Rated: A
This morning XOR Data Exchange closed a $2M extension of our Series A to support some big contracts and development work I’ll be announcing soon (some at LendIt). This extension is important to us because it represents the confidence of our investors in our business model and the work we’re doing. Here is a statement from our CEO regarding the close:
We’re grateful for the support of our investors as XOR continues to grow and address bigger industry challenges in 2017. The majority of this $2 million extension comes from our existing Series A investors, which speaks to their confidence in our business model and the innovative approach to data sharing we have employed with our clients and partners. This additional funding will allow XOR to distribute its fraud and credit risk models across the U.S. through strategic partners in order to bring security and accountability back to the companies that rely on our personal information. It’s going to be an exciting year for XOR Data Exchange and we’re thankful for the support of our community and the industries we serve.
Mike Cook, Founder and CEO, XOR Data Exchange
XOR Data Exchange raised $4.2M in its Series A round led by Fenway Summer Ventures. Details at Crunchbase.
Philadelphia Fed President Says Regulation is Key to Protecting Fintech Innovation (Crowdfund Insider), Rated: A
Patrick T. Harker, President of the Federal Reserve Bank of Philadelphia, delivered a speech today on Fintech innovation and the importance of regulation. Harker stated that regulation is not only about protecting consumers but it is important to protect innovators as well;
“It’s in their best interest to have an established framework in which to operate,” said Harker.
Recently there has been much discussion about emerging Fintech firms, more pointedly with online lenders and bank alternatives.
Mentioning online lending Harker said;
“Peer-to-peer lending has been going on since time immemorial. What makes Fintech different is that the scope of its ability to match people with one another is infinitely broader.”
Credit Peers launches property finance P2P (Finextra), Rated: AAA
Credit Peers is today launching its innovative new business – an online lending platform which allows individuals to lend from £500 upwards for property transactions that were previously only available to institutions and banks.
Recent research undertaken by Credit Peers amongst 1,000 consumers found that 59% trust their bank less than they did a year ago. 44% of respondents are looking for the rate of return on their investment to be between 5-10%*.
UK consumers are extremely open to property as an investment option, with 65% stating that they would like lenders to invest their money into property or real estate, almost double the next most popular options – stocks and shares (33%) and commodities (33%)*.
Credit Peers only deals with professional real estate investors and developers as borrowers, and implements strict lending criteria.
Specialist fund manager with marketplace lending focus to expand into UK real estate (altfi), Rated: A
Fintex Capital has hired Alan Margolis to lead its new real estate lending strategy.
Fintex is a specialist fund manager with a focus on seamlessly channeling institutional funding into the alternative lending sector.
The firm’s sole origination partner at present is German marketplace lender Auxmoney, which has originated close to €370m in consumer loans to date, according to AltFi Data.
Peer-to-peer platform plans to treble lending (Bridging&Commercial), Rated: A
Assetz Capital hopes to lend around a third of a billion pounds during 2017 as it looks to open its Innovative Finance Isa (IFIsa).
The lender revealed to Bridging & Commercial after lending £46m in Q4 2016 alone, it believes the growth target is achievable.
Assetz Capital announced at the start of the year it had lent £200m since launching in 2013 after lending £108m in 2016.
The FCA confirmed last year it was looking into the regulation of alternative finance platforms and Stuart believes that in 2017, existing regulation will be enforced more than it has been in the past as the FCA knows the industry better.
D+H Launches First Major Automotive Lender on Cloud-Based Search, Registry Solution (MarketWatch), Rated: AAA
DH Corporation (DH) (“D+H”), a leading provider of technology solutions to financial institutions globally, today announced that it is onboarding its first major automotive captive client on CollateralGuard Enterprise (CGe). The client, which boasts significant market share in Canada, will use CGe as part of its standard lending due diligence process.
CGe, D+H’s next generation search and registration solution, is a risk management technology platform for lenders, which provides a single point of entry to registries across Canada, streamlining all search and registration transactions.
CGe is a scalable platform that leverages the Microsoft technology stack, a combination of tools including Azure, which enables testing, development and agility in a secure environment.
11 Fintech Companies in UK’s Trade Delegation to Australia & New Zealand (Cryptocoins News), Rated: B
The 11 UK companies that form the delegation include credit rating specialist Aire; Fintech data analytics firm Clarus; asset allocation consultant ClearMacro; compliance solutions firm FundApps; investor relations firm Ingage; financial lenders Iwoca and Neyber; blockchain-based data platform ObjectTech; identity verification platform Onfido; surveillance and compliance solutions provider Sybenetix and; bitcoin blockchain solutions provider Tradle.
The trade delegation will participate in a 5-day program. Held between March 20 -24, there will be number of events, workshops and meetings over the 5 days.
4 exits later, these serial entrepreneurs aim to save Japan with crowdfunding (TechinAsia), Rated: A
Consumer lending is very different in Japan. Loans to individuals only make up six percent of social lending, according to Crowdport’s research. It is easy to find a one to three percent loan from a bank so the prospect of crowdfunding is less appealing.
From 2015 to 2016, the total amount raised through social lending funds grew 71 percent from around US$300 million to well over US$500 million, according to completed fund data gathered by Crowdport from each lending platform.
Crowdport launched last week and currently is the only service in Japan which compares all 18 Japanese social lending services. Users can sort by company, investment genre, and availability of collateral, as well as filter funds by interest rate and payback period.