Articles by deBanked Staff
Alt Finance Companies Secure Place on Inc. 5000
August 29, 2016If the story of alternative finance has been major growth, Inc. has quantified the latest statistics through its Inc. 5000 2016 list. Here’s a handful that you might recognize:
| Rank | Company | Growth Rate (3 years) |
| 155 | Capital Advance Solutions | 2328% |
| 176 | Channel Partners Capital | 2074% |
| 183 | Kabbage | 2027% |
| 335 | Lighter Capital | 1144% |
| 346 | Quick Bridge Funding | 1114% |
| 368 | Swift Capital | 1047% |
| 705 | Credibly | 558% |
| 763 | Square | 523% |
| 912 | Reliant Funding | 439% |
| 1259 | Blue Bridge Financial | 307% |
| 1260 | loandepot | 307% |
| 1392 | InterMerchant Services | 276% |
| 1576 | Fora Financial | 240% |
| 1726 | National Funding | 215% |
| 1928 | Tax Guard | 193% |
| 2096 | Bankers Healthcare Group | 177% |
| 2227 | Bizfi | 164% |
| 3113 | Envision Capital Group | 109% |
| 3569 | Cashbloom | 88% |
| 4217 | CAN Capital | 65% |
| 4691 | Capify | 50% |
Want to Buy a Car Online? No Problem, Says Chase
August 26, 2016Chase is chasing cars.
The banking giant launched an end-to-end digital car buying service called Chase Auto Direct, an online platform where users can not only buy new and used cars but also get financing for them through their smartphones.
The service is currently available to existing Chase customers in 30 states and about 14,000 auto dealerships in the U.S. This service lets customers connect with a dealership in the Chase network that has inventory.
“Customers today are shopping for everything online, including cars,” said Bruce Jackson, head of retail lending for Chase Auto Finance. “By pairing financing with the online car shopping experience, we can provide more opportunities for Chase dealers, and make it easier for customers to get in the driver’s seat.”
Watch John Oliver’s special on the auto lending industry here.
Marketplace Lenders Win Over Wall Street Lobbyist
August 25, 2016
The line between marketplace lending and Wall Street just got thinner with the head of a major Wall Street bank trade group switching camps.
Nat Hoopes, VP of public policy and government relations at the Financial Services Forum will head the Marketplace Lending Association.
Formed in April this year, the Marketplace Lending Association was formed by Prosper Loans, Funding Circle and Lending Club to “promote a more transparent, efficient, and customer-friendly financial system by supporting the responsible growth of marketplace lending.”
A requirement to join the association is to be matching 75% of loans, by dollar, with commitments for funding from investors before the loans are issued. The group therefore probably seeks permanent acceptance of the ability for investors to buy loans or securities backed by loans in online marketplaces.
Hoopes has held a couple of stints in Washington as legislative director to Republican senator Scott Brown and as VP of government relations for the ‘Fix The Debt’ campaign. His appointment comes at a time when marketplace lenders have been trying to gain some clout in Washington as regulatory scrutiny tightens.
Chinese Regulators to Cap P2P Investments
August 24, 2016Thanks to the Ezubao ponzi scheme that opened up a can of worms and sent a slew of Chinese P2P lenders packing, the government is considering placing caps on the P2P lending sector to protect investors.
As part of the crackdown on Chinese P2P lenders, the central bank began collecting data on the process of assessing risk and deploying capital for loans made online after authorities arrested executives from two other Shanghai-based wealth management firms in May.
As per the new proposed cap, an individual investor can only provide loans upto RMB200,000 (US $30,000) on one lending platform, and cannot lend more than RMB1 million (US $150,000) in total.
Chinese media reported that over 515 P2P platforms have shut down in the first half of the year, with fraud being a pervasive reason. Despite problems, China continues to have the largest p2p lending sector in the world.
loanDepot Raises $150 million, Plans to Hold More Loans on Balance Sheet
August 17, 2016California-based marketplace lender loandepot secured $150 million in term-debt financing to make investments in technology and product and hold loans on balance sheet.
For Q2, the company funded $10 billion in personal loans, home loans and home equity loans. Total funding for the first half of 2016 was up 16 percent compared to last year, the company claimed.
loanDepot was launched in 2010, by entrepreneur Anthony Hseih who has led companies like LendingTree, Homeloancenter.com and pioneered online consumer lending with Loansdirect, acquired by E*Trade Finance in 2001. Despite strong growth (Originating more than $50 billion worth of loans since 2010), the company postponed its November 2015 IPO because of “adverse market conditions.” For reference: Square went public six days later on November 19.
In March of this year, the company partnered with subprime lender Avant for a mutual borrower program.
John Oliver Takes On Auto Lending
August 16, 2016HBO’s John Oliver has been making the rounds in finance, this time drawing attention to sub-prime auto lending. You can watch the full clip below:
Previously, Oliver took on the debt buying industry, where he actually bought $15 million worth of aged debt for $60,000 and forgave it.
Embezzler Used Funds to Pay Lending Club Loan
August 14, 2016Brian T. Cisek pled guilty last week to charges of embezzlement and theft of union funds. A postal worker employee and chairman of the Muscular Dystrophy Association Charity Committee operated through the postal union, Cisek embezzled approximately $9,000 from the charity between January 2013 and September 2014.
According to the plea agreement, Cisek at one point duped the union into giving him a $500 advance to pay for various setup costs of the charity’s upcoming golf outing. But once he received the funds, he used them to make an overdue loan payment to Lending Club.
The statutory maximum sentence that the court can impose for his crime is 5 years imprisonment, 3 years supervised release and a fine of $10,000 or twice the gross gain or gross loss resulting from the offense.
The case number is 1:16-cr-00149-RJJ in the Western District of Michigan, Southern Division in the United States District Court.
Bloomberg’s Cory Johnson Reads Between the Lines On Lending Club
August 8, 2016Fifteen out of Lending Club’s top twenty investors have returned to the platform since the May scandal albeit at lower levels, said Lending Club’s CEO Scott Sanborn. Bloomberg News’ Cory Johnson said that the other way to read this is that a quarter of their investors have refused to come back.
Meanwhile, company CFO Carrie Dolan was still on the earnings call despite having announced her resignation moments before. Referencing the use of investor “incentives” to get investors to come back, Dolan explained that the company still anticipated higher investor acquisition costs going forward. Johnson said that this could mean for a long time, putting even more pressure on a company that has slim margins to begin with.
Watch the short clip with Johnson below:
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