Commercial lending

Prosper Marketplace's decision to eliminate 22% of its workforce is more evidence that the bloom is off the rose for a sector that had been enjoying astronomical growth.

The Treasury Department will release a white paper next week outlining "research and recommendations' related to marketplace lending as a capstone to its nearly yearlong inquiry into the fast-growing industry.

The hits that alternative lenders like OnDeck Capital are taking shouldn't be a surprise for an industry built on unsustainable business models.

Small-business optimism has slipped slightly on concerns about growth prospects and the presidential election campaign, according to a Wells Fargo and Gallup survey conducted in early April.

Prosper Marketplace Inc., one of the largest U.S. online lending platforms, is slashing its workforce 28 percent, joining rivals in signaling investors aren’t as eager to fund loans after years of rapid growth.

At least one banker has gone public with expectations that the OCC will force his institution to hold more capital. More could soon follow.

Some buyers are hanging in there, but as OnDeck Capital's disappointing first-quarter results show, investors who acquire and securitize marketplace loans are heading for hills. Among the reasons: fear of defaults, unfavorable pricing and shrinking loan yields.

OnDeck Capital reported a quarterly loss of $12.6 million as revenues fell short of expectations. At the same time, the New York firm sharply reduced its earnings projection for the rest of the year.

Green Bancorp's surprise decision to purge all of its oil credits comes at a time when other banks have been gradually paring back exposure.

With consumers generally averse to risk, financial institutions have an opportunity to rethink what it means to make bets in line with their customers' well-being.