Articles by deBanked Staff
Nonbanks Make Banksy Moves
September 13, 2016It’s starting to feel a little more bank-like in the industry.
Lending Club’s new CFO Thomas Casey, who officially starts September 19th, was the CFO of Washington Mutual Bank from 2002-2008. He’ll be taking over for Carrie Dolan who resigned immediately prior to the company’s Q2 earnings call.
Similarly, Eric Daniels, the former CEO of Lloyds Banking Group, joined Funding Circle’s board last week. He will find good company with fellow board member Bob Steel, who is the former CEO of Wachovia and former vice-chairman of Goldman Sachs.
Both companies are considered leaders in the nonbank lending industry but wear and tear is making these “marketplaces” more like the banks they originally set out to disrupt.
Business Owners Ask About Business Loans On Reddit
September 12, 2016
The front page of the Internet attracts everyone, including small business owners looking for information about business loans. Less than three weeks ago on Reddit, a self-described business owner asked if it was possible to get a small business loan despite not having been in business for two years yet. He received very few responses.
Three months ago a user asked for an alternative source to Wells Fargo to obtain a small business loan. Those that responded brought up other banks.
This cafe does 350k in revenue per year and needs a loan for more than 60k to expand. Can it be done?
There are many other entries on the popular site from users purporting to be business owners and also what appears to be a lot of missed opportunities…
Yellowstone Capital To Host Family BBQ Today on 9/11
September 11, 2016Yellowstone Capital is hosting a big outdoor family BBQ today in Hillside, NJ. The gathering includes a fundraiser for Hatzalah of Union County. A special dedication to Aviv Henry Boaz, a former Yellowstone Capital associate that recently passed away, will be presented on a newly purchased ambulance.
Again? Wells Fargo Fined $100 Million for Creating Fake Accounts
September 8, 2016The CFPB fines Wells Fargo, again — this time for opening unauthorized deposit and credit card accounts.
The agency fined the bank $100 million after employees opened “more than two million deposit and credit card accounts” unbeknownst to borrowers, racking up fees and charges, the CFPB said in a statement. Wells Fargo is also required to pay $2.5 million in customer refunds.
According to an internal analysis conducted by the bank, employees opened 1.5 million deposit accounts and 565,000 credit card accounts, issued debit cards and enrolled customers to online banking without consent, for bonuses and meeting sales goals.
“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” said CFPB Director Richard Cordray. “Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed. Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences.”
This is strike two for Wells Fargo from the CFPB which alleged that the bank indulged in illegal student loan practices by charging consumers illegal fees, not reporting credit score information accurately and a failure to provide adequate disclosures for payment information. The bank agreed to settle the case for $4 million.
HK Marketplace Lender WeLab Secures $25 Million Credit Facility from ING Bank
September 6, 2016
ING Bank upped its investment in Hong Kong marketplace lender WeLab with a credit facility of $25 million.
This follows a $160 million Series B round in the mobile and online lending company led by ING and Khazanah Nasional Bank. Founded in 2013, WeLab operates Wolaidai, a Chinese mobile lending platform for loans ranging from $50- $500 and WeLend, a P2P lending site in Hong Kong which has processed over $4 billion in loans since inception.
In the near future, the company wants to tap into the bank loan market to raise an additional $50 million and make a foray into the insurance market.
“We believe this credit facility is one of the first completed by a major bank to fund the portfolio growth of a fintech company in Asia and are confident that this will open more doors to institutional funding in the near future,” WeLab founder and CEO Simon Loong told DealStreet Asia.
The firm is backed by investors including Sequoia Capital, Yuri Milner and Guangdong Technology Financial Group. WeLend was launched as a social lending platform targeting debt consolidators and small businesses for loans up to $20,000 for two years. With the Chinese P2P market poised to take over 9 percent of total retail loans by 2018 and high fintech adoption (29 percent digital users) in Hong Kong, will this be the first of many such bets?
Publisher Walks Delicate Line With Small Business Loan Ad
September 6, 2016CAN Capital’s partnership with Entrepreneur Magazine already has one small business lending competitor upset, according to a story in the New York Times.
An article submitted to Entrepreneur Magazine by the CEO of SmartBiz appeared alongside an ad for “Entrepreneur Lending.” While the magazine has pledged to continue to feature finance content on topics beyond Entrepreneur Lending across their media platforms, distinguishing the ads from the content in a way that satisfies everyone may prove to be a delicate balancing act.
Alternative Financing Group’s Owner Indicted
September 6, 2016
Investors who thought their money was being used to fund small business loans didn’t get what they wanted, according to the SunHerald. Thomas “Lenny” Lepre, whose company Alternative Financing Group offers business loans and merchant cash advances was indicted on five counts of wire fraud on August 23rd for spending money on himself that was supposed to be used to make loans.
According to the indictment filed in the Southern District of Mississippi, Lepre “made materially false and fraudulent representations and solicited significant sums of money from investors and clients purportedly for funding of commercial services to borrowing clients, and for investments, and converted his investors and client borrowers’ monies to his own use and possession, using the funds inconsistently with the representations he had made to the investors and clients.”
The prosecution seeks a criminal forfeiture of more than $500,000. His arraignment is set for September 22nd.
Lepre is presumed innocent until proven guilty. The case number is 1:16-cr-00061-HSO-JCG.
Upcoming Industry Conference Schedule
September 2, 2016It’s not too late to sign up for this year’s remaining industry conferences. deBanked will be at all three of the following events:
Marketplace Lending and Investing Conference
Who should go?: Investors, lenders, platforms, etc.
When is it?: September 27 – 28
Where is it?: New York City
How do I sign up? Register here
Bonus: Use promo code DB to get $250 off the ticket price
Commercial Loan Broker Conference
Who should go?: Business loan brokers, MCA brokers, equipment finance companies, lenders, MCA funders, investors, etc.
When is it?: October 4 – 6
Where is it?: Las Vegas
How do I sign up?: Register here
Lend360
Who should go?: Consumer Lenders, Business loan brokers, MCA brokers, MCA funders, investors, etc.
When is it?: October 5 – 7
Where is it?: Chicago
How do I sign up?: Register here
Bonus: Use promo code deBanked15 for 15% off the registration price
LendIt Europe
Who should go?: Everyone
When is it?: October 10 – 11
Where is it?: London
How do I sign up?: Register here
Bonus: Use promo code deBankedVIP for 15% off the registration price
Money2020
Who should go?: Everyone
When is it?: October 23 – 26
Where is it?: Las Vegas
How do I sign up?: Register here
