As Feds crack down on payday lenders, fintech startups see an opportunity

first_img 7SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr The future looks grim for payday lenders. Comedian John Oliver has had them in his crosshairs since 2014, attracting millions of viewers and stirring up plenty of outrage. President Obama began expressing concerns about their exploitative lending practices last spring. Google announced last month that it would no longer allow payday lenders to advertise. And now federal watchdogs have unveiled new rules that would dismantle a business model that often traps borrowers desperate for cash in cycles of spiraling debt.“The very economics of the payday lending business model depend on a substantial percentage of borrowers being unable to repay the loan and borrowing again and again at high interest rates,” Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), told the New York Times.Payday lenders say the risks associated with serving subprime borrowers justify their practices (20% of payday loans result in re-borrowing and default). But regulators aren’t buying that argument and an increasing number of financial technology startups are reinventing the lending business with a model that promises to help borrowers and build their credit at the same time.“I applaud what the CFPB is doing,” says Joe Bayen, cofounder and CEO of a fintech startup called Lenny, which offers young borrowers credit lines up to $1,000 and a chance to improve their credit scores through a partnership with FICO. “We offer increasing balances based on how a user behaves. Everything is aimed at upward mobility and helping people.” continue reading »last_img read more

Watch Video:Ayittey Powers & Black Stars skipper Asamoah Gyan perform for President John Mahama

first_imgCheck out the performance of Brazil ambassador Shatta Wale, Ayittey Powers and captain Asamoah Gyan performing at the Banquet Hall for the Black Stars before they left for Holland.last_img