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Yesterday was rough for online lenders


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Yesterday was rough for online lenders

At , CEO RenaudLaplanche is out, andboard member John Mack's name has surfaced in conflict-of-interest waters. Alsogone, according to MarketWatch, are three senior managers.They include Adelina Grozdanova, head of institutional investors, and JeffBogan, investor group head and "thefirst proverbial cockroach," writes Zero Hedge. Sources for BloombergNews say the matter is now under SEC review.Sources for The Wall Street Journal sayperceived risks have long turned away potential investors like and .In fact, the latter's Daniel Ivascyn said the online lending industry has "allof the warning signs of potential issues." But with Laplanche'ssurprise exit, there's at least "comfort in knowing that LendingClub hasat least raised the bar for accountability,"according to the Financial Times.

Meanwhile,what's going on at EmergentCapital Inc.? Headcounthas been slashed, and its CFO and general counsel were among those cut.

California'sDepartment of Business Oversight sent another setof letters to LendingClub, Prosper Marketplace Inc., , , , , , , Avant, CAN Capital,Kabbage, Bond Street, Fundbox and CircleBack Lending, according to American Banker. This time it wantsinformation on fair lending practices, bank partnerships, four years of data toshow investor protection, loans underwritten despite little knowledge of acustomer's ability to repay and referral fees charged even though state lawrestricts it.

And equipment lender Aran Trading's containerbusiness for about $4.9 million.

If fintech firms want national bankcharters, the OCC might come up with a "limited-purpose"one, Banker reports — if theregulator even has the authority to grant them.

On top of aclass-action suit inconnection with AndrewCaspersen's alleged fraud, broker/dealerPJT Partners Inc.took a $3.3 millioncharge in the first quarter.

Brexit worriesare shaping flexitclauses. Companies that want a loan in the U.K. may be asked to sign off on aninterest rate increase if Britain leaves the EU. Sources for the FT say andDeutsche Bank AG areamong those that have discussed the clause with clients, but it isn't expectedto catch on.

In more banking news:

Raymond Jamesanalysts are feeling optimistic about energy-exposed banks, saying worst case scenarios are"already baked in" their stock prices and that any provisionincreases are unlikely to be as high as they've been. Upgraded are in North Carolina,Oklahoma-based BOK FinancialCorp., Mississippi's Hancock Holding Co., Dallas-based and Houston-basedProsperity BancsharesInc. Upgraded to "strong buy" are in Louisiana, Dallas-basedTexas Capital BancsharesInc. and Salt Lake City-based Zions Bancorp.

The analystsadd real estate seems a bigger concern.

And over inMaryland, Community Bank of theChesapeake ended its Fed membership.

The day ahead

Earlymorning futures indicators pointed to a higher opening for the U.S. market.

In Asia, theHang Seng rose 0.43% to 20,242.68, while the Nikkei 225 was up 2.15% to16,565.19.

In Europe, asof midday, the FTSE 100 was up 0.77% to 6,161.83, and the Euronext 100 rose1.26% to 864.70. 

On the macro front

The NFIBSmall Business Optimism Index, the Redbook and the wholesale trade report aredue out today. 

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