A growing number of refinancing products have increased student loan refinancings in recent years; however in the current environment, borrowers may see less savings from refinancing; borrowers reported average rate refinancing reductions of 2.2% earlier this year and that number has been trending lower since 2014 when borrowers reported rate reductions of over 3%; in 2016 student loan refinancings accounted for over $200 million for institutions on the LendKey platform; that value and the business for alternative refinancing platforms is at risk of trending lower as rates rise and the benefits of refinancing decrease overall. Source
The Federal Open Market Committee raised its target for the federal funds rate to 0.50% to 0.75% at its December meeting; Fed officials also signaled a more aggressive approach for rate increases in 2017 with projections showing the potential for three more rate increases next year; improvements in the labor market, positive GDP growth and stable inflation were key market factors for the rate increase. Source
According to data from the Bank of England, unsecured consumer credit in the UK increased to 1.9 billion British pounds ($2.34 billion) in November and reported its highest level since March 2005; experts believe UK consumers have been increasing debt to take advantage of the market's low interest rates; P2P lenders have benefited from the increased demand for debt, reporting the highest growth rate in unsecured lending over the past five years, according to a November 2016 PwC survey; in the corporate market, businesses reported lower demand for credit with bank lending to non-financial businesses down 767 billion British pounds ($945 billion) in November. Source
Consumer borrowing increased by $15.2 billion in February, according to a report from the Federal Reserve; credit card borrowing increased by $2.9 billion helping total credit card debt outstanding to increase to $1 trillion; auto loan and student loan borrowing also increased in February by $12.3 billion. Source
Deutsche Bank has reported increased defaults in commercial mortgage backed bonds tied to malls and retail stores that they underwrote in 2012 and 2013; the bank is suggesting investors short the BBB- rated portion of the 2012 Markit CMBX price index, known as the series 6, which they say is tied to these investments; their analysis sees these bonds with pre-crisis attributes which successful investors shorted to avoid losses. Source
According to a paper by the China Banking Regulatory Commission (CBRC) blockchain technology should be adopted by China’s secondary loan market; as CoinDesk reports the paper came out of a trip made by the regulator to their counterparts in the UK and France; European banks are putting together a program to test blockchain technology for the issuance of syndicated loans; the CBRC also considers blockchain technology to potentially be helpful for automating compliance. Source.
The National Consumer Assistance Plan from the three major US credit bureaus was created following a 2015 settlement and seeks to improve credit reporting accuracy; it will exclude tax liens and civil judgments that do not conform to reporting agency standards; exclusion of these two items is likely to help consumers receive a slight increase in their credit score; medical debt is also being excluded until 180 days after the delinquency; VantageScore and other credit agencies are also taking some new factors into consideration when calculating credit scores including trended data and number of accounts. Source
Since 2008, a number of changes have occurred affecting the U.S. financial industry and its regulations; simultaneously financial technology has also been evolving rapidly and market conditions have actually been a catalyst for P2P lending platforms; Forbes finds, as many market experts have recently discussed, that P2P lending platforms' extension of credit to a more diverse range of borrowers and built in accountability through investors and lenders, is providing a new type of support for the credit market that could help to prevent another crisis in the future. Source
Financial institutions reported decreased bank lending in China in March; according to a report from the People's Bank of China, financial institutions issued new loans of 1.02 trillion yuan ($148 billion) in March, a decrease from CNY1.17 trillion ($170 billion) in February; nonbank lending increased in March, with total social financing reported at CNY2.12 trillion ($308 billion), an increase from CNY1.15 trillion ($167 billion) in February. Source
The most recent report on US consumer credit shows credit card debt reaching a new high and surpassing the previous peak reached in 2008; outstanding credit card debt in June was $1.02 trillion; source discusses increased market competition in the credit card market; also notes higher default rates yet increased risk taking given the improved market environment. Source