Weekly Online Lending Snapshot – June 30, 2017
The Wall Street Journal reported that Square will enter the consumer lending space by enabling their small business users to provide credit for their customer base. Customers who decide to participate in the program will have the option to finance invoices over a period of three, six, or twelve months. This week it was announced that Kiva, a platform dedicated to social lending for social good, surpassed $1 billion in loans. Another socially oriented platform, LENDonate, launched a new hybrid online lending platform that enables 501(c)(3) nonprofits to source loans and donations simultaneously. In regulatory news, the Financial Stability Board (FSB), which coordinates regulation for the G20 Economies, has published a report stating that fintech does not pose a risk to financial stability. It was reported that state regulators appeared before the Senate Committee on Banking to advocate for less regulation on small banks that do not pose a systemic threat. On a similar note, a NBER working paper called Fintech, Regulatory Arbitrage, and the Rise of Shadow Banks, using the mortgage industry as its focus, posits that a significant percentage of the growth of fintech in lending is due to bank’s increased regulatory burdens. In the U.K., the Bank of England has ordered banks to increase their countercyclical capital buffer to 0.5% from its current 0% level due to risks posed by macroeconomic factors. Annual consumer lending growth in the U.K. slowed to 5.1% in May, the slowest pace in a year and half. In securitizations, College Ave, an online student loan refinancing and origination company, has closed its first securitization for $160.89 million. DBRS assigned the notes A-1, A-2, B, C ratings of A (sf), A (sf), BBB (sf), and BB respectively. Also SoFi Consumer Loan Program 2016-1’s (SCLP 2016-1) class A notes were upgraded from A to AA due to less than expected losses.
Full weekly snapshot reports can be downloaded on our research page here.
Thanks and have a great weekend!