Amazon will now allow customers to add cash to their Amazon accounts through barcode scans at participating retailers throughout the US; funds will be immediately available for use; the firm says the initiative is expected to target underbanked customers; Morgan Stanley says the announcement could decrease the chances of the firm partnering with PayPal for payments which is a deal the market has been potentially anticipating between the two companies. Source
Loan servicing company Navient has marketed support for student loan borrowers as part of its customer service strategy however its defense to a court case says the opposite; the company is being sued by the Consumer Financial Protection Bureau (CFPB) for not instituting customer service that matches its customer commitments; the CFPB's main argument is that Navient did not take into account the best interest of borrowers, specifically directing struggling borrowers into payment plans versus capped payment solutions because of the time intensive registration of the latter option; Navient blames a lack of compensation from clients such as the US Education Department for the company's service constraints; the Education Department finds no merit in Navient's defense and the CFPB has data that estimates Navient's service caused borrowers to pay an additional $4 billion in interest charges; Navient has evidence citing a significant number of borrowers in income-repayment plans and has solid arguments including that the federal law does not require servicers to counsel customers on their repayment options. Source
Through the partnership Zoho will offer Fundbox credit products to its customers in the US; Zoho is a cloud-based operating system for businesses; Zoho's customers rely on the system to manage their finances, invoices and working capital; with the Fundbox partnership, businesses can now easily connect with Fundbox for credit solutions to manage their cash flow planning. Source
Representative Patrick McHenry says Dodd-Frank reform is not likely to make it to the House of Representatives until June or July; he is confident in major changes for the regulation from the House of Representatives however he foresees opposition from Senate democrats; in an interview with WSJ Pro Financial Regulation he also provided his insight on a range of regulatory aspects which could be integrated into legislation in various ways. Source
Lending Club has hired Santiago Suarez, JPMorgan's head of new technologies; he will join Lending Club as the firm's head of strategy and mergers and acquisitions; at JPMorgan, Suarez was involved with testing blockchain and machine learning; he also worked in the bank's corporate strategy group, focused on managing top strategy issues for the bank. Source
Consumer demographics are changing with more volatile income, and less interest and access to traditional banking products; LendUp has been working to provide a broader array of solutions for an underserved demographic of consumers and the fintech company has reported a number of successes; it has originated over $1 billion from more than 3.3 million loans; success for the company has come from offering innovative and diverse solutions paired with educational support; examples include graduated credit products that help customers migrate from a $250 emergency loan to a $1,000 installment loan to a $300-$500 low-balance credit card; the firm has integrated initiatives that improve credit availability for on time payments and credit management classes, also reporting $55 million in savings for customers. Source
Acorns is a US micro-investing app that invests spare change in ETFs; it has announced the appointment of former Wealthfront CEO, Adam Nash, to its board of directors; the firm also says it is researching behavioral economics as part of its marketing strategy and has added Shlomo Benartzi, professor and co-chair of the Behavioral Decision-Making Group at the University of California, Los Angeles, to its board. Source
Financial inclusion is a factor considered by the Office of the Comptroller of the Currency (OCC) in all of its banking charters; American Banker discusses how the fintech charter's financial inclusion provisions compare to the Community Reinvestment Act requirements for banks; the new fintech charter would require fintechs to detail how they plan to promote financial inclusion with accountability from the OCC for those goals and more direct OCC enforcement actions for fintech companies. Source
Global Debt Registry (GDR) has been steadily growing its business now announcing that Prosper will join the firm's verification network; by partnering with GDR, Prosper can enhance the reporting for its institutional investors; according to John Goldston, director of capital markets at Prosper, "GDR's eValidation and eVerify asset certainty tools fit easily into our existing data structures and processes, allowing our investors to seamlessly access GDR's enhanced verification and loan-level diligence services." Source
Shareholders of PayPal have sued firm directors implying that management falsified statements in quarterly reporting related to Venmo; as a subsidiary of PayPal, Venmo's business activities influence the overall results of the firm; in 2016 Venmo was investigated for unfair and deceptive practices resulting in a fine and ongoing investigations with the FTC; shareholders are arguing that PayPal did not properly disclose and inform shareholders of the implications of the investigations which led to shareholder losses of approximately 15%. Source