A Year in Review: Crowdfunding and P2P Lending 2016

At the end of one year and the beginning of the next, it’s important to look back at how the previous year went, as well as to look at some major events that occurred during that time. The industry certainly made a lot of progress in 2016, with the Jobs Act being updated and the Fix Crowdfunding Act being drafted. U.S. Legislation aside, we’re going to review the top 5 biggest events to happen in the industry in 2016 and talk a little about their implications.

1. Renaud Laplanche resigned as CEO from Lending Club
   • Both surprising and disappointing, we were sad to see Renaud go, as he was one of the original industry leaders. It did have a negative impact on some of the lending platforms for the final quarter or so.
2. The Office of the Comptroller of the Currency announced a new, incoming for 2017 Fintech Charter
   • The OOC is seeking public comment on the fintech charter and it can potentially create a new or modify the current regulatory structure for market place lending.
3. Goldman Sachs Launches Consumer Lending Platform, Marcus
   • An example supporting the following point the hybrid is taking over
4. The Pure Marketplace Lending Model is Dead the Hybrid Takes its Place
   • This is an opinion supported by many of the leaders in the industry due to the disruption in the capital markets. In all, this would make sense, as the Hybrid model would represent a synthesis of how lending was done previously and how we’ve been doing it more recently.
5. Supreme Court Denies Petition to Hear Madden v. Midland
   • For those of you unfamiliar, this case is about whether or not an issuing bank can use their (typically) home-state interest rate cap in other states. While this is viable in some cases, wherein the state they would be exporting the rate to has a higher cap than their own, often times, the usury cap for the 2^nd state is lower and that’s where the issue arises. So, because the Supreme Court refused to hear it, the Second Circuit’s decision is what we are left with and all loans are being kept in NY, CT and VT.

And there you have it, the top 5 interesting events to happen in the industry during 2016. Have some different conclusions or events you think were more important? Let us know what you think!

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