Underbanked

Consumers who have borrowed from online lenders owe more and have lower credit scores than similarly situated consumers who have not used online lenders, according to a study released Thursday by the Cleveland Fed. The provocative findings seem likely to spark intense debate.

Rather than pull up stakes and leave two low-income Mississippi towns at the mercy of payday lenders, Regions Bank donated the branches to a local credit union and kicked in another $500,000 for operating costs.

Bill Donnelly was named the first-ever finance chief at San Francisco-based LendUp.

Capital Corps, led by Steven Sugarman, aims to provide financing to homeowners and small businesses that it believes are overlooked by banks. The firm features several former Banc of California executives.

The company, which recently bought Sabadell United in Miami, is pledging to make billions of dollars in mortgages and small business loans in low- and moderate-income communities.

Deserve is offering unsecured cards to young adults who do not have traditional credit scores. The Silicon Valley startup uses a proprietary algorithm that analyzes bank account activity to evaluate the likelihood that borrowers will repay.

TD Bank has pledged $3 million to provide credit counseling to small-business owners. The hope is that those owners will use commercial loans to replace personal credit cards and home equity as their primary forms of business funding.

The ROI with the incremental costs and considerations will determine whether to proceed or not whether it is cashless, cash, or other alternative payment methods, writes Laura Townsend, senior vice president of the Merchant Advisory Group.

Banks could help narrow the financing gap for U.N. development goals to be met, but changes in Basel and loan guarantee standards are necessary.

The tech giant won praise from consumer groups for its decision to ban ads for high-cost consumer loans. But the policy contains a big loophole, and advertisers have found multiple ways to exploit it.