Receiving Wide Coverage ...
Racing Stripe: The latest round of private funding for Stripe, a start-up that offers software and services that process payments for businesses, has boosted the value of the company to just under $9.2 billion, nearly double what it was worth less than two years ago and making it the most valuable U.S. fintech company, according to the Wall Street Journal. "Stripe's investors think the company can capitalize on the fast growth of online payments as consumers transfer more of their offline spending to internet retailers and as Stripe continues to expand internationally," the paper said. Stripe plans to use the new funds for acquisitions international expansion.
But not all "tech-based financial innovations have come from venture capitalists or young hotshots," the New York Times reports, "but rather from professionals who have toiled away in their industry for decades." For example, a financial planning firm in San Diego was one of the first to come up with a software package to help advisors rebalance their clients' portfolios, previously a tedious and complex process. The company's own employees created Total Rebalance Expert, or TRX, which automates the rebalancing process for advisory firms.
Double-edged sword: Banks stand to benefit from the sharp rise in interest rates since the election, except in one area: mortgage lending. The average rate on a 30-year fixed-rate mortgage has jumped nearly 60 basis points recently to 4.16%, a 16-month high, according to the Mortgage Bankers Association. Higher rates shut off refinancing and price many prospective homebuyers out of the market. But that's a plus for investors in mortgage-backed securities, as higher rates mean fewer loans will be paid back early.
Indeed, "the speed and size of the increase took many lenders and borrowers by surprise — and the increase is expected to reverberate across the housing industry, particularly if rates continue to rise next year," the New York Times reports, taking the consumer's point of view. One borrower saw his mortgage rate quote jump 25 basis points in just one afternoon.
Wall Street Journal
Selective enforcement: Rather than trying to repeal the Volcker rule big banks and their lawyers are advocating a simpler approach that doesn't require Congressional approval: Stop enforcing it. "Enforcing the rule remains subject to considerable interpretation," the paper notes.
Crash: After years of rapid growth, marketplace lending "has gone into reverse, as concerns over the quality of the assets pumped out by the likes of Lending Club, Prosper and Avant have spread a chill across the sector," the FT says Monday. Loan losses have been greater than expected, and new data shows loan volume fell 21% in the third quarter to less than half the amount in last year's fourth quarter.
New York Times
Arbitration, please: Wells Fargo asked a federal district court in Utah last Wednesday to order dozens of customers who are suing the bank, for allegedly opening of accounts without their permission, to seek redress via arbitration rather the courts. According to the article, Wells' motion came in response to the first class-action lawsuit filed against the bank since the phony accounts scandal became public.
Whither Cordray: The Times profiles Consumer Financial Protection Bureau Director Richard Cordray, at the battle over the agency and its leadership could escalate. The Republican-dominated Congress and the incoming Trump administration want the agency weakened if not eliminated, while Democrats in his home state of Ohio want him to run for governor in 2018, which would require him to quit his job. "Champions of the agency are imploring him to stay, arguing that if he leaves, the agency is likely to be defanged, its powers to help consumers sapped," the Times reports.
"I'm satisfied with the progress we have made, but I'm not satisfied in the sense that there's a lot more progress to be made. There's still a lot to be done." — CFPB Director Richard Cordray.