Industry News
C-level Credit Exec Leaves Lending Club for Affirm
September 21, 2017Lending Club’s Chief Credit Officer and Interim General Manager, Sandeep Bhandari, has joined fintech lender Affirm, according to Affirm CEO Max Levchin. Levchin posted the following on LinkedIn:
I am excited to announce and welcome Sandeep Bhandari to Affirm, Inc. as Chief Strategy and Risk Officer (CSRO).
Sandeep joins us from Lending Club where he was the Chief Credit Officer (CCO). Prior to Lending Club, he was at Capital One for many years, where he was Assistant Chief Credit Officer at Capital One Bank (Credit Risk Management) and Venture Partner (Capital One Ventures). Prior to that Sandeep held a variety of roles requiring expertise in strategy, credit risk management, marketing, product development, and underwriting across several lines of business including consumer and small business credit card, auto lending, and mortgage and home equity lending.
We are excited for Sandeep to join us for our next phase of rapid growth and to help us fulfill our mission of delivering honest financial products that improve lives.
The move comes on the heels of Lending Club announcing their “most advanced and predictive credit model ever.” Bhandari was responsible for credit strategy and overall credit risk management at Lending Club and presumably would’ve overseen that.
Talkative investors on the LendAcademy forum were not immediately sold on Lending Club’s new system, however. Some users bemoaned that Lending Club is ignoring common sense in favor of data. In one instance, the CEO of PeerCube referenced an interest rate anomaly alleged to be discovered in Lending Club’s pricing as “Data-driven but knowledge-unaware.”
Affirm and Lending Club differ. Whereas Lending Club targets the credit card refinancing market, Affirm helps consumers finance purchases. Last month, Affirm and Walmart were reportedly in talks to offer financing to consumers.
New CTO at Breakout Capital is Former CTO of Capital One Labs
September 18, 2017
Firoze Lafeer, the former Capital One Head of Tech Fellows Program and CTO, Capital One Labs, is now the CTO of Breakout Capital, a Breakout representative confirmed. Lafeer was with Capital One for five years, most recently running the company’s experimental product & technology incubator and accelerator.
Breakout Capital is a fintech small business lender based in Mclean, VA where Lafeer will lead technology, including scaling their tech platform.
Last month, Breakout hired Robert Fleischmann as Senior Vice President, Strategic Partnerships and Tom McCammon as Senior Vice President, Business Operations. Fleischmann was previously Director of Strategic Partnerships at RapidAdvance. McCammon was previously the Director of Portfolio Management and Credit Operations at OnDeck.
PayPal’s Global Head of Product Comm Joins Lending Club
September 14, 2017Anuj Nayar, PayPal’s global head of product communications, has moved on to Lending Club as VP and head of communications, according to published reports. Nayar was also previously Head of Mac Public Relations at Apple from 2003 to 2008.
At PayPal, Nayar was the primary spokesperson on a range of proactive and reactive issues, according to his LinkedIn profile.
Lending Club has struggled in the PR department since May 2016 when the company’s founder resigned.
The SoFi Story Has Spun Into a Lurid Tale About Misbehaving Silicon Valley Startups
September 13, 2017
The SoFi story is slowly unraveling from a handful of unhappy employees seeking relief through the courts to a full-on Silicon Valley frat house anything-goes sexcapade scandal. If you haven’t been following along, below are links to help you catch up on how the story has unfolded:
8/11 – NY Times – Another Silicon Valley Start-Up Faces Sexual Harassment Claims
8/11 – California Superior Court – Read the complaint by former employee Brandon Charles
8/15 – deBanked – The Employee Suing SoFi Only Worked There for Three Months
8/19 – deBanked – SoFi Hit With Class Action Lawsuit Over Wage Issues
8/31 – California Superior Court – Former employee Brandon Charles amends complaint to include CEO Mike Cagney as a defendant and adds Defamation as a claim
9/1 – SoFi – SoFi hires third party to conduct internal investigation
9/11 – SoFi – A Note From SoFi CEO Mike Cagney
9/11 – NY Times – Chief Executive of Social Finance, an Online Lending Start-Up, to Step Down
9/12 – deBanked – SoFi’s CEO is Stepping Down
9/12 – SoFi – Responding to the New York Times
9/12 – Dealbreaker – SoFi Scandal Turning Quickly From “Nothing Was Sexual” To “Everybody Is Having Sex With Everybody”
9/13 – NY Times – ‘It Was a Frat House’: Inside the Sex Scandal That Toppled SoFi’s C.E.O.
9/13 – Vanity Fair – “IT WAS A FREE-FOR-ALL”: INSIDERS SLAM SOFI’S “FRAT HOUSE” CULTURE AS C.E.O. RESIGNS
In the last few months, the CEO & chairman, CFO, CRO, and a co-founder have all resigned.
SoFi’s CEO is Stepping Down
September 12, 2017
SoFi’s long slow grind towards an IPO is coming to a screeching halt. Mike Cagney, SoFi’s CEO, is reportedly stepping down as chairman effective immediately and will be resigning from his CEO position later in the year. The hope is that this will relieve outside distractions such as pending lawsuits, the WSJ and NY Times report.
SoFi co-founder Dan Macklin and SoFi CFO Nino Fanlo both stepped down in May. Meanwhile the company’s Chief Revenue Officer, Michael Tannenbaum, left the company in July. In the Spring, SoFi announced that with an IPO in limbo, employees could begin to sell their vested stock.
It’s an inauspicious time given the battle the company is gearing up for to secure an industrial banking charter. Among the lawsuits bearing down on the company are allegations of sexual harassment and unpaid wages, while the NY Times reports Cagney “may have been overaggressive in expanding SoFi’s business, skirting risk and compliance controls” while also possibly having inappropriate relationships with SoFi employees.
Tom Hutton, a board member, will immediately replace Cagney as chairman.
Only a month ago, Cagney reportedly suggested that IPO plans were back in the works.
SOS Capital Offers Super Bowl Tickets As Part of Charity-Driven Football Contest
September 10, 2017
Think you’re good at NFL predictions? SOS Capital is offering anyone the chance to win Super Bowl tickets in their football eliminator contest. The entry fee is a $100 donation to the JJ Watt Foundation to support Hurricane Harvey flood relief in Houston, TX.
Pool Details:
- $100 Donation Entry Fee
- Winner Receives 2 Super Bowl Tickets- Courtesy of SOS Capital
- 100% of proceeds will be donated to JJ Watts Charity
- Unlimited Entries Allowed
- Kicks Off Week 2 of the NFL Season
- Deadline to enter is Thursday Sept 14th 2pm
Contact SOS Capital for details on how to join and donate. Call 212-235-5455 or email Charity@soscapital.com
I have already made my donation to the JJ Watt Foundation and joined. I hope to see many others of you in the contest!
Square Wants to Become a Bank
September 6, 2017
Square is expected to apply for an Industrial Loan Company (ILC) bank charter this week, according to American Banker and other sources. Like SoFi, who is busy trying to do the same thing, their attempt will also face competitive resistance.
In June, Richard Hunt, president and CEO of the Consumer Bankers Association (CBA), told deBanked that in the case of SoFi, “The whole world is evolving, fintech is evolving. This was inevitable one way or another.” It is therefore not entirely surprising that Square is following SoFi. Others may wait to see how the regulatory debate plays out before putting in applications of their own, however.
“No one envisioned when they wrote the ILC charter that we would have fintech companies that finance mortgages and student loans from private equity capital and not deposits. It’s a new world. Like with all rules and regulations, federal regulators should periodically review longstanding policy,” Hunt said.
Several people from the banking industry argue that the ILC charter route is a loophole and that if fintech companies exploit it and screw up, they could put the entire banking system at risk.
Christopher Cole, executive vice president and senior regulatory counsel at the Independent Community Bankers of America (ICBA), previously said, “We have been fighting the ILC charter for over a decade. When Walmart tried to apply for an ILC charter in 2006 we objected at that point. And that resistance was part of the reason why they never got a charter.”
On August 25th, Congresswoman Maxine Waters requested that a hearing be held on ILC charters to weigh all the concerns before acting on new ILC applications.
Until then, just because Square wants to become a bank, doesn’t mean they will succeed in doing so.
No, Able is Not Going Out of Business, Company Says
September 5, 2017
An industry blog appears to have stretched the truth, again.
On September 1st, Lending Times published a story that relied on an anonymous source to suggest that Austin,TX-based Able Lending is going bankrupt and selling their portfolio. No other compelling evidence is offered other than Lending Times not having their messages returned. No clues as to what kind of knowledge the source might have and why they have it is provided.
Another blog piled on top of that story by circulating an email this afternoon with “Able Lending closing down?” in the subject line. That blog also wrote that their messages were not returned.
I personally reached out to Able and received an immediate response. Company CEO Will Davis pointed out a flaw with Lending Times’ anonymous source. “This anonymous source doesn’t seem to be anyone close to Able, because Able does not own a portfolio of loans (it originates and distributes loans to direct lenders, who then hold those loans on their balance sheet) and therefore has no portfolio to sell,” he said.
Davis also speculated that there could be an ulterior motive. “We believe this story originated by the fact that we’ve been in active discussions with a number of originators to acquire Able, and there’s a non-zero chance this story was placed in order to throw an interested party off the trail,” he explained.
“In any event, we have no plans to go out of business and no plans to declare bankruptcy,” he concluded.
