Weekly Online Lending Snapshot – April 14, 2017
Last week we saw the first initial public offering (IPO) of 2017 for an online lender, Elevate Credit (ELVT), a lender focused on subprime consumer lending, announced the close of its IPO of 12,400,000 shares of common stock at a price of $6.50 per share. The Federal Reserve Bank of New York released its 2016 Small Business Credit Survey. According to respondents to the survey, while online lenders are increasingly becoming an option for small businesses in need of credit, banks continue to be the most common source of financing. It also indicates small business owners tended to prefer using personal funds to overcome financial challenges, rather than applying for credit. It was reported that Bank of America launched an online lending pilot program for consumer auto loans that allows prospective car buyers to research financing options from specific local dealerships, and ultimately apply for auto loans for specific cars. In regulatory news, it was reported that online lending partner banks WebBank and Cross River Bank, based in Utah and New Jersey respectively, have filed actions seeking to exempt them from Colorado’s statutory limits on interest rates and fees. This is in response to recent complaints filed by the Colorado Attorney General based on previous “true lender” and loan assignment cases.
Note that this report is updated as of Thursday’s market close to ensure we can get it to you before the weekend. Please contact us with any feedback or suggestions you may have for future snapshots.