OnDeck and Bank Partnership Concept Debated on CNBCJanuary 13, 2016 | By: Sean Murray
On CNBC’s Squawk Box, OnDeck CEO Noah Breslow responded to questions about why the fintech goal post of putting banks out of business has seemingly been readjusted. Breslow said that their mission all along has been to extend the market for credit, namely by originating small dollar loans (under $1 million) that banks can’t or have been unwilling to do. He supported that by saying that this market has always historically been underserved and is not just a consequence of the last recession.
More importantly though is the debate over whether or not banks should build, buy or partner with alternative lenders. (Hello marketplace Lending Hunger Games!) OnDeck believes their 8-year head start is an attractive reason as to why banks should “partner” with them.
On regulation, Breslow classified OnDeck as a “non-bank commercial lender,” which may be true from a regulatory perspective, but it’s a big departure from the sexy technology marketplace platform characterization that they’ve historically campaigned under.
Lastly, the OnDeck – JPMorgan Chase deal apparently does carry exclusivity and it is possible for them to engage in other partnerships.
Full video on CNBC below: