This week, the most interesting alternative lending news from Lending-Times includes:
- Congresswoman asks FDIC to hold public hearings on SoFi’s bank charter application. The SoFi bank charter application has banks clamoring over each other’s backs to squelch SoFi’s plans to start an industrial bank under a law that allows non-financial companies to open a bank. SoFi wants to do just that. This story ran in the Monday August 28, 2017 edition of Lending-Times. It’s interesting news because Wal-Mart had once applied for a bank license using the same legislation as SoFi and were denied. But SoFi isn’t Wal-Mart. I’m hoping they’re allowed to open a bank.
- Klarna profits increase by 138 percent. Klarna is a European company that provides a point-of-sale financing solution for retailers. They are very prominent in Europe but have recently opened their doors to U.S. business. They will have to compete with U.S. company Affirm, however, that does the same thing. I believe POS financing will be HUGE. This story also ran on Monday.
- Ford to use alternative data for credit scoring. On Tuesday, we ran a story that reported auto manufacturer Ford is using alternative data on subprime borrowers. I wonder if other auto financing companies will follow suit.
- Millennials prefer auto and personal loans to credit cards. This story ran Wednesday. TransUnion discovered that millennials prefer personal loans, even auto loans, to credit cards. A part of the reason may be because a law was passed that forbids credit card companies from advertising on college campuses, but it’s likely because millennials are hip to online technologies where a large niche of lending companies market toward millennials in the area of personal loans.
- SeedInvest to host live crowdfunding. Yesterday, Lending-Times reported that SeedInvest will host live crowdfunding at LendIt Europe. That’s incredible news.
- Funding Circle cuts off smaller brokers. Funding Circle is based in the UK. Usually, when a company makes this kind of move, it’s to make shareholders happy. If it costs more money to work with smaller brokers than is made by doing so, then the company will be more profitable by not working with them. We also reported this story in yesterday’s Lending-Times.
- Irish credit unions embrace Facebook Loans. I didn’t even know Facebook had a loan program until today. Evidently, this is a pilot program, but the fact that it’s credit unions rather than community banks makes it very interesting news to me. I wonder how long it will be before U.S. credit unions offer loans through Facebook. Oh, and, does this make Facebook a fintech company?
- Mobile fintech vs. traditional bank products. This is an incredible read. It isn’t news so much as analysis, but it’s outstanding analysis of a rollup of companies, even traditional banks, doing mobile fintech really well. Lending-Times included this in this morning’s daily digest.
Lending-Times is a client of mine with whom I just clinched the deal for additional editing-related responsibilities.
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