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A small Austin, Texas, bank, formerly called Libertad, had to abandon its initial plan to target unbanked Hispanics. But it has made the most of its second chance by finding a niche in lending to real estate investors. Now it's looking to diversify.
May 27 -
Marketplace lending platforms like Lending Club still need banks to make the loans. Cross River Bank CEO Gilles Gade, who has deals with 14 platforms and has talked with dozens of others, explains the mechanics of these agreements in a Q&A.
February 24 -
Because of a regulatory quirk, Lending Club and its competitors depend on banks to issue their loans. The set-up raises questions about the regulatory outlook for the fast-growing marketplace lending sector.
December 18
Austin Capital Bank, a $71.4 million-asset institution based in Texas, will originate loans for a new online consumer lending platform called Self Lender, the two companies announced.
Denver-based Self Lender is marketing loans that it says will build the credit history of Americans who are financially underserved and have thin credit files. The deal with Austin Capital Bank will allow those loans to be marketed nationwide, according to the companies.
"Austin Capital Bank is excited to be able to offer credit builder loans to help financially underserved, and underbanked consumers establish credit history," Erik Beguin, Austin Capital Bank's chief executive and president, said in a press release.
[Coming this November:
With the agreement, Austin Capital Bank joins the ranks of small banks that are originating loans for online lending platforms, an arrangement that allows the technology firms to avoid state-by-state licensing requirements.
Utah-based WebBank, which has $236 million in assets, is originating loans for Lending Club, a publicly traded company valued at $6.4 billion. Other small banks competing for this type of business include Cross River Bank, a $344 million-asset institution in Teaneck, N.J. Under these arrangements, the banks often hold the loans on their books for only a few days.
