Lending Industry News
May 23, 2017
Top Stories

2016 has been a tough year for San Francisco-based Lending Club. Scott Sanborn, who took over as CEO and who'd served as the company's COO prior, has taken drastic steps to get the company back on course. In less than a year, Sanborn cut and rehired 179 jobs and hired a new CFO, COO, general counsel and chief capital officer. In addition, the company launched a new auto refinance product and an investor mobile application, Lending Club Invest.


Ron Suber's job title is president of Prosper Marketplace. It barely describes the role he's assumed at the center of San Francisco's flourishing fintech community. Suber spends much of his time inexhaustibly networking, investing in and advising fintechs. He's invested in 16 of them, including high-profile players like DocuSign and SoFi, and serves as an official adviser to a half dozen of them, at last count. 


It took nearly a decade, but debt has made a comeback. Americans have now borrowed more money than they had at the height of the credit bubble in 2008, just as the global financial system began to collapse. The Federal Reserve Bank of New York said Wednesday that total household debt in the United States had reached a new peak - $12.7 trillion - in the first three months of the year, another milestone in the long, slow recovery of the nation's economy.


Let's be candid. The hedge fund landscape is a wreck. Mediocre performance for years. Heavy fee burdens. Limited disclosure. No real asset flows in years (except for performance increases). Finally, uncorrelated alpha seems to be a thing of the past. However, in the past few years, there is a new industry emerging offering the promise of uncorrelated alpha, and, the holy grail: current income. It's not exactly a hedge fund, but it falls under the alternative investment banner that families and institutions rely on to enhance performance and meet funding goals.


While technology has made great strides in democratizing access to information and transportation, the financial services industry, including mortgages, has been somewhat slow to evolve and reach historically underserved populations, including low-income, underbanked and disabled individuals. According to data from the Federal Deposit Insurance Corporation (FDIC), 27% of U.S. households were unbanked or underbanked in 2015, a fact which is at least partially attributable to lack of access to financial services.


Even as TransUnion noted that auto finance origination volume appears to be losing a little steam, the Federal Reserve Bank of New York's Household Debt and Credit Report released on Wednesday showed how the balances consumers are absorbing for their vehicles helped to push total consumer debt above the highest level ever recorded. The report indicated that total household debt reached $12.73 trillion in the first quarter, surpassing the peak of $12.68 trillion reached during the recession in 2008.

Webinar


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Events
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Washington, D.C.

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June 22
Offices of Arnold Porter & Kaye Scholer
New York, NY 10019