Wall Street banks limit their support for online lenders
New York
WALL Street banks are scaling back their role in supporting debt sales that have helped online lending companies double their originations every year since 2010.
Investment banks earn fat fees by helping lenders pool and store their loans until enough are aggregated for sale to investors. But Goldman Sachs Group Inc, Credit Suisse Group AG and JPMorgan Chase & Co are among the Wall Street firms considering limits to their financing for companies that lend to certain higher-risk borrowers, people with knowledge of the policies said. The caution comes in response to a May ruling by the US Appeals Court in Manhattan, which threatens to remove a protection that non-bank lenders have relied on to make high-interest loans. The issue boils down to whether these lenders can pay a bank in an unregulated state to make loans to borrowers in other jurisdictions, where the interest rates could be considered usurious.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Banking & Finance
Japanese yen slides back towards 34-year low after brief spike
China’s Bank of Communications Q1 profit rises 1.44%
HSBC’s private bank shuts independent asset management business in HK, Singapore
Nomura Q4 net profit jumps almost eight-fold on retail income surge
Rescue pup to meme star: the real-life ‘Dogecoin’ dog
Money laundering accused Zhang Ruijin slapped with 5 more charges days before scheduled guilty plea