On the macro front, Core CPI rose by 2.2% YoY in December, in line with economists’ expectations and slightly above the FOMC’s long-run inflation target. Fed chair Powell noted this week that the Committee would be patient in raising interest rates this year. The Chair reiterated they expect strong economic growth in the US but are concerned about a slowdown in global growth. Fed officials have indicated that they are willing to pause rate increases, especially if the economy weakens due to slowing growth abroad.
Consumer credit continues to grow. The Fed reported that consumer credit outstanding grew at an annualized rate of 6.7% in November to $3.98 Tn. This is the third month out of the past four that consumer credit grew more than $20 Bn, for the first time in four years.
Source: Federal Reserve, PeerIQ
LendingTree’s personal loan offers report for November showed that 37% of personal loan inquiries were for debt consolidation and 31% for refinancing credit cards. Refinancing higher cost debt has helped borrowers manage their debt service costs, keeping them well below their peak even though consumer credit outstanding is at all-time highs.
In regulatory news, there is a multi-pronged effort to provide a national regulatory swim lane to FinTech firms or a viable multi-state licensing alternative. The OCC has started accepting applications for the FinTech charter and the FDIC is also encouraging applications from de-novo banks. Meanwhile, the OCC has filed a motion seeking to dismiss legal claims from state regulators to the FinTech charter. The OCC is defending its authority to issue the charter, and resolution of this litigation will pave the way for FinTechs to apply for the charter. You can read more about our take on the OCC’s Fintech charter here and access our webinar presentation here.
Reach out to learn how PeerIQ’s risk analytics can help FinTechs satisfy risk management supervisory standards.
This week, we present PeerIQ’s 4Q2018 MPL Securitization Tracker.
PeerIQ’s 4Q2018 Marketplace Lending Securitization Tracker
We are pleased to release our 4Q2018 Marketplace Lending Securitization Tracker. Our quarterly Securitization Tracker analyzes securitizations of marketplace lending loans. We highlight several main themes below:
- Jeff Bezos and Jamie Dimon: Best of Frenemies (WSJ, 1/15/19) JPM and Amazon have collaborated on credit cards, but there is an uneasy peace between the two companies as Amazon looks to get into financial services.
- S. Consumer Prices Ticked Lower in December (WSJ, 1/11/19) Core CPI rose by 2.2% YoY in December, in line with economists’ expectations. CPI including food and energy, which is more volatile, rose by 1.9%.
- Fed’s Powell Affirms Flexible Rate Outlook (WSJ, 1/10/19) Fed chair Powell noted this week that the Committee would be patient in raising interest rates this year and reiterated that he saw strong economic growth in the US.
- Fintechs may finally win charter chase in 2019 (American Banker, 1/9/19) There is a multi-pronged effort to provide a national regulatory swim lane to FinTech firms or a viable multi-state licensing alternative.
- OCC seeks dismissal of states’ lawsuit opposing fintech charter (American Banker, 1/8/19) The OCC has filed a motion seeking to dismiss legal claims from state regulators to the FinTech charter. The OCC is defending its authority to issue the charter.
- Fintech funding reaches new high (American Banker, 1/9/19) Venture capital investments in FinTech companies in 2018 rose by 39% YoY to $11 Bn.
- Cross River Bank Partners With Stripe To Power The Marketplace Economy With Push-To-Card Payments (PR Newswire, 1/19/19) Cross River Bank has partnered with Stripe to provide freelance workers better access to their earnings.
- LendUp spins off credit card business, names new CEO (American Banker, 1/10/19) Subprime fintech lender LendUp has spun off its credit card business and has named Anu Shultes the CEO of the on-going entity.
- Bankers joining fintechs find adrenalin and bruised egos (FT, 1/8/19) Vikram Pandit, an investor in PeerIQ, and ex-Barclays CEO Anthony Jenkins talk about the ups and downs of working with FinTech companies.
- Lending Startup Affirm to Test High-Interest Savings Accounts (Cheddar, 1/9/19) Affirm is the latest FinTech lender to offer deposit services, advancing towards its mission of re-inventing banking.
- If you want to remember an event, don’t take a picture (Popular Science, 1/8/18) The downside of our obsession with taking photos is a poorer recall of the actual event and an eventual lowering of the ability to remember.