Articles by deBanked Staff
House Passes Bill That Would Help More Consumers Build Credit
June 26, 2018
Yesterday, the house passed the Credit Access and Inclusion Act of 2017, a bill that would allow reporting of telecom and utility payments to credit reporting agencies. The idea behind the bill, written by Rep. Keith Ellison of Minnesota, is to give people more opportunities to report positive on-time payments that could improve their credit.
“By allowing more of Americans’ positive financial information to be reported to credit rating agencies, this bill will help millions more Americans access credit and everything that comes with it,” Ellison wrote in a statement. “Once this bill is signed into law, millions of Americans who previously couldn’t will now be able to access lower-cost loans, cheaper car payments, or a mortgage on their first home.”
If passed in the Senate, the law would allow a person to present to a consumer reporting agency information about payments “with respect to a dwelling, including such a lease in which the Department of Housing and Urban Development provides subsidized payments for occupancy,” according to the bill.
This bill is an amendment to the Fair Credit Reporting Act, which was originally passed in 1970.
Usury Argument in Merchant Cash Advance Suit Backfires Horribly
June 25, 2018
A New York Supreme Court judge in Erie County, New York has had enough with attorneys trying to argue that merchant cash advances are loans. In Yellowstone Capital, LLC v. Central USA Wireless, LLC et al (Index No: 811837-2017), the Honorable Timothy J. Walker balked at the defendants’ argument that the MCA agreement was usurious.
“The only ‘proof’ that Defendants submit in support of their usury claim are self-serving misconstructions of cherry-picked provisions of the merchant agreement, and an outright disregard for contrary provisions contained in that document,” he opined.
Citing dozens of trial court decisions in merchant cash advance cases and binding precedent established by Champion Auto Sales, the judge not only shot the usury argument down but also awarded the recovery of attorney fees to the MCA company for having to defend themselves against something so frivolous.
“The Court determines, in light of the history of these litigated matters and known binding precedent, Plaintiff is entitled to recover reasonable attorneys’ fees and costs incurred in defending the Motion [..],” he ordered.
Woman Arrested in Connection With Finance Company Data Theft
June 19, 2018
A woman was arrested in the Bronx this morning and charged with felony computer-related theft. The individual, whose name deBanked is not releasing until more information is known, was reportedly stealing customer data from Yellowstone Capital despite not being employed there. The photo shows police officers escorting her out from her home.
She is the third person to be arrested for stealing data from Yellowstone Capital in the last nine months but she’s the first that was not actually working there at the time.
Yellowstone Capital is arguably the largest merchant cash advance company in the country, according to deBanked’s leaderboard. The companies ranked ahead of them are lending companies, not MCA.
Triumph Business Capital Completes Acquisition of Factoring Assets
June 14, 2018Triumph Bancorp, Inc. (NASDAQ:TBK) recently announced the closing of the acquisition of the transportation factoring assets of Interstate Capital Corporation by Advance Business Capital, also known as Triumph Business Capital.
Triumph Business Capital is a wholly owned subsidiary of TBK Bank, SSB, which is a wholly owned subsidiary of Triumph Bancorp. The assets acquired include all of the accounts receivable and transportation factoring assets and operations of Interstate Capital Corporation (ICC) and certain of its affiliates. Following the closing [of ICC], the acquired operations will continue to be conducted under the ICC brand name.
Triumph initially announced its agreement to acquire the transportation factoring assets of ICC on April 9, 2018, but the acquisition was made final at the beginning of the month. Triumph Bancorp, Inc. is a financial holding company headquartered in Dallas, Texas, with a diversified line of community banking and commercial finance activities.
Reliant Funding is a Sponsor of deBanked CONNECT – San Diego
June 14, 2018Reliant Funding is a sponsor of deBanked CONNECT San Diego. The half-day event for funders, lenders, brokers and industry professionals is being held at the Andaz on October 4th!
Check out photos from deBanked’s past CONNECT event in Miami
National Funding is the Title Sponsor of deBanked CONNECT – San Diego
June 14, 2018National Funding has signed on as the title sponsor of deBanked CONNECT San Diego. The half-day event for funders, lenders, brokers and industry professionals is being held at the Andaz on October 4th!
Check out photos from deBanked’s past CONNECT event in Miami
An Inside Look at Strategic Funding’s Portfolio
June 10, 2018A Kroll Bond Rating Agency report reveals interesting details about Strategic Funding Source’s $105 million securitization and also their business. Here are a few main takeaways:
Pool breakdown
60% MCA
40% Loans
Average original receivable balance per merchant: $40,705
Weighted Average FICO Score: 649
Weighted Average RTR Multiple: 1.35
Weighted Average Time in Business: 12.5 years
Weighted Average Gross Revenue: $1,729,709
Number of ISOs/referral partners: 1,300
In an earlier interview, Strategic Funding CEO Andrew Reiser said, “It’s certainly exciting to be able to meet the requirements of a securitization. Kroll is a very responsible agency and they put you through a lot of rigor to be able to meet [their] requirements and have a rated bond.”
PeerIQ Report Shows Mixed Signs for Non-Bank Lending
June 7, 2018PeerIQ released its 2Q2018 Lending Earnings Insight Report today, presenting forward-looking insights into the FinTech & non-bank space.
The report said that CEOs and CFOs see tax reform as increasing consumers’ disposable income. However, “an increasing supply for credit and demand for credit, as well as re-normalization trends and increased competition are leading to higher charge-offs.”
Credit performance this quarter is mixed, the report says. The analysts observe improvements, yet also record low delinquencies from OnDeck, OneMain Holdings and FinTechs in particular. At the same time, LendingClub expects 31 bps lower charge-offs moving forward due to tighter credit standards. At Discover – which is typically a bellwether for personal loan performance – the net charge-off rate jumped 92 basis points year over year to 3.62 percent. This is the largest increase in several years.
According to the report, card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses moving forward. The report also notes that banks are either partnering with FinTechs or investing in ramping up their technology capabilities in payments, lending, digital banking and wealth management.
Lenders are taking actions to pass rising rates on to borrowers to protect margins and investor returns, the report says. Lenders are also trying to reduce all-in funding costs by reducing the credit spreads on their securitizations.
On the brighter side, the report said that “FinTech and Non-Banks overall posted good revenue growth [in Q1 2018] in the range of 7% to 25% and most expressed optimism about the exceedingly good credit environment we find ourselves in.” Enova, OneMain Holdings and OnDeck saw some of the lowest charge-offs, with Lending Club indicating that expected charge-offs across grades would be up to 31 bps lower, according to the report.
