Marketplace lending

Banks, marketplace lenders and other nonbank lenders were dealt a setback when a federal appeals court declined to reconsider a ruling that has set off alarm bells across the consumer finance industry.

C2FO, the operator of an online marketplace for small-business financing, announced a $40 million equity funding round led by a Singapore investment firm.

The Office of the Comptroller of the Currency is trying to "supercharge" its process for reviewing financial innovations in an effort to keep pace with a glut of new products inside and outside the banking system.

Rejiggering the credit-scoring system won’t do much to expand credit access. Instead, banks and financial services companies should start thinking about new ways to evaluate the situational factors that influence borrowers’ reliability.

Lending Club and Funding Circle are among the firms pledging to adhere to a range of self-imposed standards in small-business lending.

The next financial crisis will probably originate from online lenders, hedge funds or other unregulated entities that are taking on some of the greatest credit risks, CIT Group Inc. Chief Executive Officer John Thain said.

In the worst-case scenario, they'll get state licenses and reprice a portion of their loans, but executives of the highflying industry say they doubt such steps will be necessary.

Lending Club reported a small quarterly loss on Tuesday as the marketplace lender stuck with its strategy of pursuing growth rather than near-term profitability.

Heavier second-quarter marketing expenses at OnDeck Capital highlight a concern throughout the marketplace lending industry: the high cost of customer acquisition as competition from banks and nonbank startups heats up.

Many online small-business lenders worry that future regulations could stymie innovation in this fast-growing industry. But well-designed requirements would simply ensure that online lenders can offer adequate borrower protections without giving up market share.