While consumers in general began filing more complaints when payments for federally owned student loans restarted in October 2023, service members face some unique challenges, the Consumer Financial Protection Bureau (CFPB) said in a Tuesday (Sept. 24) press release outlining findings from its Office of Servicemember Affairs Annual Report.

For example, service members stationed overseas may have difficulty reaching their student loan servicer during regular call center hours, according to the release. Service members complained to the CFPB that they spend hours trying to reach their student loan servicer and often find that the call fails to resolve the issue.

Another common complaint involves income-driven repayment (IDR) plans, the release said. Because service members often must move every two or three years, their spouses often change jobs and see a drastic change in income. Service members often complain to the CFPB that their loan servicers incorrectly calculate their monthly repayment amounts under IDR plan.

Service members also complain that colleges and universities withhold transcripts when trying to collect a debt or disputed fees, per the release. Service members must frequently move to new duty stations, so they need timely access to transcripts.

“Service members who have worked hard to get an education while serving our country should not face additional obstacles that cause financial strain or put career opportunities at risk,” CFPB Director Rohit Chopra said in the release. “The CFPB is committed to supporting and protecting the financial well-being of service members, veterans and their families.”

Beyond student loans, all major consumer financial products were the subject of more complaints submitted to the CFPB by service members in 2023, according to the release. The number of such complaints was up 27% from 2022 and up 98% from 2021.

The CFPB said in January that it was monitoring the experiences of student borrowers after the resumption of federal student loan repayments.

The regulator found at that time that student borrowers were encountering long hold times when trying to reach student loan servicers, delays in application processing times for IDR plans, and inaccurate billing statements and disclosures.

The post Service Members’ Complaints About Student Loans Rise, CFPB Says appeared first on PYMNTS.com.

The global syndicated loan market, a $7 trillion-plus industry where loans are extended by multiple lenders to a single borrower, is no different. These loans, often ranging from millions to billions of dollars, are too large for any one lender to handle alone. Instead, various financial institutions — banks, funds and other entities — join to pool their resources and share the risk.

“Faxes and PDFs are still flying around,” Versana Founding CEO Cynthia Sachs told PYMNTS. “They are still a significant part of how information moves in this market. And firms need to ultimately processes them and get them into systems.”

Data on loan performance, cash flows and interest payments is — in many cases — still being shared via manual processes, slowing down the system and leaving room for errors, she said.

Since the turn of the 21st century, what began as a private, niche space grew into a massive network of corporate loans, involving thousands of lenders, funds and financial institutions. But with its growth came operational challenges, as, despite this rapid growth, the infrastructure supporting the market remained largely outdated, with major, global players relying on antiquated processes to manage crucial data flows.

“Everyone has to maintain their own books and records, which is a complicated, inefficient process when you’re dealing with millions of dollars and multiple players,” Sachs said. “You have a whole bunch of different things going on here, and nobody has managed so that everyone has good data to put into the right system to ultimately make the best decision off of.”

Recognizing these inefficiencies, major financial institutions have started to embrace digital solutions designed to modernize and streamline in real time the way loan data is processed and shared within the fragmented syndicated loan and private credit ecosystem.

Real-Time Digital Data Platforms Are Revolutionizing the Syndicated Loan Market

While big banks like J.P. Morgan, Bank of America (BofA), Barclays and others began to realize that the syndicated loan market needed to be digitized and modernized, regulators, including the Securities and Exchange Commission (SEC) also started to raise concerns about the lack of transparency and the potential risks posed by the current system.

“The SEC started to look at this and said, ‘This isn’t healthy,’” Sachs explained. “They didn’t want to step in, but they made it clear that something had to change.”

Against this backdrop, Versana, a centralized, real-time data platform that offers “golden source” data for the market was formed, she said. The platform aims to address the inefficiencies plaguing the syndicated loan market and provide a centralized, real-time data hub that can bring clarity, speed and scalability to all players involved — whether they are originating loans, servicing them or investing in them.

“J.P. Morgan, BofA, Citi and Credit Suisse were the initial investors,” Sachs said. “Now, we’ve grown that to nine investors, including major institutions like Barclays, Morgan Stanley, Deutsche Bank, Wells Fargo and U.S. Bank.”

These financial institutions are not just investors — they are also contributors to the platform’s data. By committing their data digitally, in real time, from their source systems, they help create a unified, accurate dataset that the entire market can rely on.

“For fund managers, having the right data is critical,” said Sachs, noting that Versana now has data on $2.7 trillion-worth of corporate loans.

“If you’re managing a portfolio of corporate loans, you need accurate, timely information to make decisions and manage your books,” she added.

The Evolution of the Syndicated Loan Market

One of the key benefits of any digital platform is its scalability via network effects. As Sachs noted about Versana, the more institutions that adopt the platform, the more powerful it becomes, offering comprehensive coverage of loan portfolios.

This kind of collaboration is particularly important in the syndicated loan market, where no single institution should realistically take on the risk of a large corporate loan alone. By enabling seamless data sharing between lenders, Versana helps ensure that everyone involved in a deal has the information they need to manage their positions effectively.

“Our goal is to bring the entire market together,” Sachs explained. “When you have the best data, in real time, you can scale your business and make better decisions.”

To help scale its solution, Versana earlier this month raised $26 million and added Barclays, the company’s first British bank, to its platform.

Still, Sachs acknowledged that while some institutions are eager to adopt new technologies, others are more hesitant.

“Some of our clients are early adopters,” she said. “They see the value of the platform and are ready to integrate it into their accounting software right away. Others are more cautious and want to wait until there’s more coverage before they fully commit.”

Sachs said this is just the beginning.

“Once we have all this great data centralized in one place, we can build new products on top of it,” she said. “Versana is not just about modernizing the market. We want to continue to innovate and offer new solutions that help the market grow and scale. Everyone wins when the market has the best data and the technology to use it.”

The post Digital Platforms Promise Real-Time Fix for Loan Market’s Fax Problem appeared first on PYMNTS.com.

But that doesn’t mean they don’t bear repeating — especially against a backdrop of fierce demand for streamlined, efficient and customer-friendly financial processes.

“Digital basically upends manual, paper-heavy and operationally cost-intensive processes,” Andrea Moe, vice president of customer success at Amount, told PYMNTS during a conversation for the series “What’s Next in Payments: How Do You Do Digital?”

It’s these processes that have traditionally defined legacy banking systems, Moe added, stressing that adopting digital tools within the financial services space not only enhances operations and customer engagement, but also drives greater profitability.

This shift is especially important as customer expectations increasingly favor speed, convenience and automation in financial services.

“Modern money experiences typically engage younger generations of banking customers,” Moe said.

Revolutionizing Digital Engagement in Lending

Amount’s core offering lies in its loan origination and account opening software solutions. These tools help lenders, from community banks to nonbanking financial institutions, move away from creaking and outdated workflows that result in friction-filled experiences for their customers.

“Part of our role is helping our clients with their own customers by looking at the overall effectiveness of their funnel, of their policies, of the ways that they’re mitigating fraud,” Moe said. “And each of our customers comes to us with some nuance as it relates to their own unique priorities and what’s important. Together, we help them in striking a balance between risks and outcomes.”

This dual focus ensures that lenders can expand their reach and deepen customer relationships without compromising on security or compliance.

“The time is always ripe for disruption, regardless of the segment,” Moe said. “Lenders that typically have relied on in-person relationships and the more traditional modes of application intake, verification and contract signing are also increasingly leaning into digital and automation.”

One of the key insights Moe shared was the shift in digital engagement across different customer groups. While younger generations have long been early adopters of digital financial services, more traditional lenders that have historically relied on in-person relationships are also beginning to try automation and digital processes. The ability to adapt to customer preferences is a critical component of modern banking, and Amount provides the tools necessary to enable that adaptability.

The Digital Transformation Imperative and Role of Data in Measuring Success

As financial institutions move to embrace the adaptability offered by digital platforms, measuring success becomes both a qualitative and quantitative exercise. According to Moe, data plays a crucial role in showing firms where they can achieve the highest return on investment as they digitize.

“Lenders can expand their reach, they can add new households, they can also deepen that wallet share within their existing base of customers, too,” she explained, noting that it’s important to think through “not just the tech, but also the organizational change management that needs to accompany that in order to best facilitate the move from manual to digital.”

Moe pointed out that many lenders miss out on potential revenue because customers abandon online applications. Additionally, fraud losses and penalties from compliance infractions can deplete margins. The marketplace is full of digital solutions like Amount’s that address these pain points in a measurable way.

For example, one of Amount’s clients launched a new consumer loan program and saw that 80% of applications were funded without human intervention. Another client reduced application-to-funding time from two weeks to just 15 minutes, underscoring the operational efficiency gains that digital technology can bring.

In an industry that is rapidly evolving, financial institutions are under increasing pressure to modernize their operations. Looking ahead, Moe expressed excitement about the future of digital lending and Amount’s role in shaping it. The company is focused on continuing to develop innovative solutions, including around artificial intelligence, that drive customer engagement, enhance risk management and deliver superior performance outcomes — all combined with a deep understanding of client needs.

“You’re able to incorporate new technology in a safe and responsible way that drives real efficiencies,” Moe said.

The post Memo to Lenders: Go Digital or Go Home appeared first on PYMNTS.com.

Late payments on loans have leveled off after increasing earlier in the year, Reuters reported Friday (Sept. 13).

Delinquency rates across all household liabilities — including credit cards, auto loans, personal loans, retail cards and first mortgages — declined to about 2% in August, lower than the 2.5% seen in the pre-pandemic year of 2019, the report said, citing data from Equifax.

Net charge-off rates, which reached their highest level since 2011 in the second quarter, have also leveled off, according to the report.

The report attributed the earlier increases in delinquencies and defaults to consumers being challenged by a drop in the savings they built up during the pandemic and to the rise in living costs.

Now, however, many consumers’ financial positions are improving as inflation slows, the report said. In addition, banks tightened their lending standards amid fears of a potential recession.

Moving forward, consumers’ financial status could continue to improve if the economy and the labor market remain resilient and the Federal Reserve cuts interest rates, per the report.

The Federal Reserve’s Consumer Credit Outstanding report released Monday (Sept. 9) showed a jump in most forms of consumer debt. The $25 billion bump in credit outpaced the roughly $12 billion that had been the consensus.

Forty-three percent of consumers revolve their debt, according to the PYMNTS Intelligence report “New Reality Check: The Paycheck-to-Paycheck Report: The Credit Card Use Deep Dive Edition.”

The percentage rises to 65% among consumers who live paycheck to paycheck with issues paying bills and 51% for those who live paycheck to paycheck but without issues paying bills, the report found.

Bank of America CEO Brian Moynihan cautioned last month that if the Federal Reserve does not cut interest rates soon, American consumers could become disheartened.

“They’ve told people rates probably aren’t going to go up, but if they don’t start taking them down relatively soon, you could dispirit the American consumer,” he said.

The post Consumer Delinquency Rates Decline as Inflation Slows appeared first on PYMNTS.com.

Through the Walmart Marketplace Capital program, eligible sellers can access financing through Parafin, an embedded finance firm and an approved Walmart Marketplace solution provider, Parafin said in a Wednesday (Sept. 11) press release.

The Capital by Parafin program under Walmart Marketplace Capital offers funding provided by Parafin with one fixed capital fee, no interest or late fees, payments based on a percentage of the seller’s sales, and repayment periods of up to nine months, according to a Walmart Marketplace Capital web page.

“Parafin is on a mission to help grow small business,” Sahill Poddar, CEO of Parafin, said in the release. “Walmart is a leader in the small-medium business economy and is driving life-changing growth for these businesses that ultimately deliver on Walmart’s mission of helping people save time and money.”

“We are incredibly fortunate to begin working with Walmart to offer SMBs new resources to grow on Walmart,” Poddar added.

This is the latest in a series of new offerings added to Walmart Marketplace, which is the retailer’s eCommerce platform for third-party sellers.

In August, Walmart said it added new product categories, omnichannel experiences and fulfillment solutions to the eCommerce platform.

“We’re bringing all the pieces together to be much more than a marketplace and investing in new ways for sellers to serve customers as we grow together,” Manish Joneja, senior vice president, Walmart Marketplace and Walmart Fulfillment Services, said in an Aug. 27 press release.

Also in August, Walmart partnered with digital payments platform WorldFirst to let eCommerce sellers based in China collect funds from Walmart Marketplace. This new digital payment collection service will provide online sellers with added security and compliance, with funds deposited straight into a merchant’s World account, with no service charges.

Walmart Marketplace began working with Cart.com in April to simplify onboarding and help both new and existing sellers grow their sales on Walmart’s platform. Customers using Cart.com’s multichannel management platform can access special incentives across Walmart Marketplace’s shipping, advertising and repricing services as well as support for onboarding and customer success.

The post Parafin Begins Offering Embedded Financing to Walmart Marketplace Sellers appeared first on PYMNTS.com.

But the ripple effect, even with the lowered “cushion” that must be in place, may be that the banks tighten access to traditional lending products, spanning everything from personal loans to cards to working capital.

In doing so, the door may be opened for digital platforms and FinTechs, unencumbered by such capital requirements, to make some competitive inroads.

At a high level, the banks are reported to be facing a 9% boost in capital requirements, which is lower than the 19% increase that had been originally sought by regulators, including the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency. The 9% push would apply to the biggest banks — J.P. Morgan and Bank of America among them. A full report of the requirements, commonly referred to as Basel III, will be published later this month.

In a speech Tuesday morning (Sept. 10), Federal Reserve Vice Chair for Supervision Michael Barr told the Brookings Institution that the 9% proposal means that “The largest, most complex firms should be subject to the most stringent requirements, in light of the costs that their potential failure would impose on the broader financial system and thus on businesses and households.”

For banks, higher capital requirements reduce the money that can be put to work in the markets, so capital itself becomes more expensive because liquidity is diminished. The banks, as is the case with any business, seek returns on their business, and would demand a higher cost paid to borrowers (to at least maintain or improve the rates of returns on loans).

The 315-page Federal Register documentation of the regulators’ proposal put forth last year contended that “Although a slight reduction in bank lending could result from the increase in capital requirements, the economic cost of this reduction would be more than offset by the expected economic benefits associated with the increased resiliency of the financial system.”

Uncertain Impact

Barr said Tuesday that he intends to recommend to the Fed that the central bank lower the risk-weighting of certain loans, specifically for residential real estate and loans to retail customers. The risk-weighted assets (commonly referred to as RWA) determine how much capital the bank needs to have in its coffers to protect its depositors. PricewaterhouseCoopers said in an analysis published as banks pushed back (particularly on the high-teens percentage point bump), per the Fed’s own data, that overall credit would decline by 4%.

Separately, the Financial Services Forum said borrowing costs could be boosted by 0.25% (which can have an outsized impact on the costs of loans) while costing the U.S. economy over $100 billion. Shadow banking may benefit.

The movement toward a finalized risk-based capital structure will be a work in process that spans months, and a commentary period will be in the works. In the meantime, the banks may scale back lending in the face of uncertainty, preserving capital ahead of time, so to speak.

One segment that might be hit hard is small businesses, where lending has already been tightening. The National Federation of Independent Business reported Tuesday that small business “optimism” declined in August, as high inflation is a key concern. Sales expectations are waning, and yet more than half of businesses are still making capital outlays (as it takes money to keep up plant and equipment, no matter if a firm is expanding or not). Only 26% of firms said all their credit needs were met; 60% said they were not interested in a loan; and 7% said loans were harder to get.

The need for capital may change amid economic volatility.

The PYMNTS Intelligence report “One-Quarter of SMBs Plan to Increase Corporate Card Usage This Year” found that 47% of small- to medium-sized businesses (SMBs) with annual revenues of $10 million or less had access to business or personal financing. That leaves roughly half without access.

The initial winners for lending to consumers and businesses as new rules are hammered out for banks may be the lending platforms backed by nonbank capital, outside investors or peer-to-peer lending. That includes companies such as LendingClub, SoFi and others.

As Barr noted Tuesday, “capital has costs too. As compared to debt, capital is a more expensive source of funding to the bank. Thus, higher capital requirements can raise the cost of funding to a bank, and the bank can pass higher costs on to households, businesses and clients engaged in a range of financial activities. These activities are critical to a well-functioning economy that works for everyone. That’s why it is important to get the balance between resiliency and efficiency right.”

The 9% boost in capital requirements for the big banks may bring relief compared to the original 19% proposed increase, but time will tell if the balancing act has been pulled off.

The post Capital Costs vs. Economic Growth: The Fed’s Balancing Act on Bank Lending appeared first on PYMNTS.com.

With this collaboration, lenders using MoneyLion’s hosted decisioning engine will be able to integrate Nova Credit’s cash flow underwriting data and analytics, the companies said in a Tuesday (Sept. 10) press release.

“Cash flow data is essential for understanding consumers more holistically and unlocking more ways to provide consumers with the services they need,” MoneyLion Chief Product Officer Tim Hong said in the release. “Our partnership with Nova Credit strengthens MoneyLion’s ability to provide financial institutions with better tools to make informed credit decisions and expand the range of consumers they can serve.”

MoneyLion’s digital finance ecosystem powers distributable embedded marketplaces, enables financial product providers to acquire consumers at scale and connects consumers with real-time, personalized financial product offerings and services through its network of financial product providers, according to the release.

Nova Credit’s cash flow analytics platform, Cash Atlas, allows lenders to use consumer-permissioned bank transaction data to gain a more complete view of credit risk and make more informed underwriting decisions, the release said.

Together, these solutions allow both expanded access to credit and enhanced risk management, per the release.

“The ability to see new lending opportunities within existing populations is a huge lift to lenders that work hard to acquire and build strong consumer experiences,” Nova Credit CEO and Co-founder Misha Esipov said in the release.

Forty-one percent of financial institutions are adopting embedded finance solutions and 48% are enhancing their banking-as-a-service (BaaS) capabilities, according to the PYMNTS Intelligence and NCR Voyix collaboration, “Embedded Finance and BaaS: From Marketing Buzz to Banking Bedrock.”

The report found that the growing adoption of these technologies reflects a broader industry shift toward more agile and integrated financial services, positioning banks to better compete with emerging digital and FinTech players.

MoneyLion’s growth has been driven by an increasing number of suppliers (lead sources), an expanding consumer base and a broadening range of financial product options available on the platform, MoneyLion CEO Dee Choubey told PYMNTS CEO Karen Webster in an interview posted in August.

“We measure success by how many decisions a consumer’s making on our platform in a recurring manner over time,” Choubey said.

The post MoneyLion and Nova Credit Deliver Cash Flow Data to Lenders appeared first on PYMNTS.com.

In the tables and discussions that give a read-across on risk — in this case, the risks tied to the proverbial money in the bank — there is granularity on insured and uninsured deposits.

Insured deposits refer to the deposit accounts at FDIC-insured banks that are protected in the event of a bank failure, where the backstop is $250,000 per depositor (across a variety of ownership categories).

Deposits Trend Down but Loans Tick Up

Across the industry, deposits were lower overall. The FDIC noted in its report that insured deposits decreased $96 billion (0.9%) from the first quarter. Uninsured deposits decreased $50.4 billion (0.7%).

“Banks with assets greater than $250 billion, in aggregate, reported lower uninsured deposits in the second quarter, while banks with assets less than $250 billion, in aggregate, reported higher uninsured deposits,” the FDIC said.

In the meantime, lending activity picked up. Loan balances were up “modestly” from the most recent quarter and from a year ago, as total loans gained 1% from the first quarter, inching ahead by $125.8 billion, per the report.

Loans to non-depository financial institutions (NDFIs) surged by 9.6%, or $76 billion, and “much” of the growth came as certain loans were reclassified, the report said. Generally speaking, NDFIs are classified as everything from private equity to private credit to peer-to-peer lenders.

The rise of lending to NFDIs, as recently as the end of last year and as detailed in a request for comment, has attracted more scrutiny of regulators, including the Federal Reserve, the Office of the Comptroller of the Currency (OCC) and the FDIC, seeking input on revising and expanding the reporting on loans held by the NDFIs, which now top $786 billion.

Banks with $10 billion or more in total assets would report the loans to mortgage credit, business credit, and consumer credit firms. Modifications to the proposal have included more reporting on delinquencies and foreign exposure.

The risks have been highlighted in recent months, and the risks transcend borders. As reported over the summer, Financial Stability Board (FSB) Chair Klaas Knot said recent “incidents of market stress and liquidity strains” have been tied to nonbank financial firms (also known as shadow banks, which could include the finance firms mentioned above).

The Federal Reserve estimated that the credit line commitments to nonbanks stand at about $1.5 trillion, with investments ranging from mortgage-backed securities firms to private equity firms to warehouse financing to asset-backed securities firms.

“The common view is that banks and NBFIs operate in parallel, performing different activities, or they act as substitutes of each other, performing substantially similar activities, with banks inside and NBFIs outside the perimeter of prudential regulation,” the Fed said in the June blog post “Banks and Nonbanks Are Not Separate, but Interwoven.” “We argue instead that NBFI and bank activities and risks are so interwoven that they are better described as having transformed over time rather than as being unrelated or having simply migrated from banks to NBFIs.”

The post FDIC Sees Non-Depository Financial Institution Loans Surge, Hinting at New Risks appeared first on PYMNTS.com.

As Bloomberg News reported Thursday (Sept. 5), the lender — Latin America’s largest — is enjoying rapid growth, with around 60% of Brazilian adults using its app and its stock up 109% over the past year.

However, the report adds, there is a growing number of skeptics who are puzzled by Nubank’s popularity, finding its approach to lending troubling.

The bank reported last month that non-performing loans of 90 days or more reached a record 7% during the second quarter, while also lowering provisions for bad debts to $760 million from $831 million three months earlier.

According to Bloomberg, late payments for 90 days or more are now substantially higher than the 5.5% average for the banking sector calculated by Brazil’s central bank.

While Nubank doesn’t break down non-performing loan or credit data by country — it does business in Brazil, Mexico and Colombia — Bloomberg notes that 90% of its customers are in Brazil.

“The discussion on credit quality made us decide to follow this from a little further away,” Fernando Fontoura, a portfolio manager at Persevera Asset Management in Sao Paulo, told Bloomberg.

In June, Persevera sold the entirety of its Nubank shares it held as the position became “crowded,” said Fontoura. The Bloomberg report notes that JPMorgan Chase UBS reduced their recommendations on the company to neutral in July, due to worsening asset quality.

Executives have defended the pace of lending growth, with Chief Operating Officer Youssef Lahrech saying in an earnings call that the bank prioritizes long-term strategies over “short-term non-performing loan metrics.”

And the bank’s press office told Bloomberg that concerns about Nubank’s performance are not the Wall Street consensus, pointing the news outlet to the strategy outlined on its earnings calls in lieu of additional comment.

Reached for comment by PYMNTS, Nubank pushed back against aspects of the Bloomberg report, arguing that the news outlet references reports based on Brazilian Central Bank data using a different loss provision methodology than the one Nubank employs.

A bank spokesperson added that Nubank’s credit philosophy prioritizes decisions that optimize its credit cohorts’ long-term net present value (NPV) instead of short-term non-performing Loan (NPL) metrics.

“When Nubank identifies an asset class or customer segment with compelling risk-adjusted returns that also encourages responsible customer behavior, the company actively pursues growth in these areas,” the spokesperson said. “This strategy has yielded increased revenue and greater resilience that are more than offsetting the higher delinquency rates that come with it.”

Nubank announced in May that it had amassed more than 100 million customers, saying it was the first digital banking platform to reach this milestone outside of Asia. At the time, the bank said it had more than 92 million customers in its home country, upwards of 7 million in Mexico and nearly 1 million in Colombia.

“In 2013, we had set ourselves the ambitious goal to reach 1 million customers in five years, which seemed almost impossible at the time,” Nubank founder and CEO David Vélez said in a news release. “In a decade, we have surpassed 100 million, which is a testament to the trust our customers place in us and to the power of a truly customer-centric business model.”

The post Nubank Defends Lending Practices as Late Payments Jump appeared first on PYMNTS.com.

Introduced Wednesday (Sept. 4), the offering lets customers lend out any fully paid stock in their portfolio, with Robinhood taking care of finding interested borrowers.

“Stock Lending is another innovative way for our customers in the UK to put their investments to work and earn passive income,” said Jordan Sinclair,  president of Robinhood UK. “We’re excited to continue to give retail customers greater access to the financial system, with the product now available in our intuitive mobile app.”

Once shares are loaned out, the company said, customers can use the app dashboard to track earnings, see their positions and enable or disable lending. Stocks are backed by cash collateral at a third-party bank for additional protection, Robinhood added.

“Since launching Robinhood in the UK last November, we’ve heard from customers what’s resonating in-app and what features they’d like to see in the future,” the company said. “So far, we know they love no commission fees and no FX fees on trades, our easy-to-use mobile app and key features such as fractional shares and 24/5 trading.”

Robinhood began offering trading to customers in the U.K. last year, part of a broader effort by the company to expand into international markets.

In June of this year, the company acquired the cryptocurrency exchange Bitstamp for $200 million. The purchase of Luxembourg-based Bitstamp marks Robinhood’s first institutional business, providing it access to Bitstamp’s institutional offerings such as white-label solution Bitstamp-as-a-service, institutional lending and staking.

“At the same time, Robinhood faces challenges, such as the recent Wells notice from the Securities and Exchange Commission (SEC), a sign of impending enforcement action against the company, one which raises concerns about the future of Robinhood’s crypto trading arm,” PYMNTS wrote last month.

The company contends that the crypto assets listed on its platform are not securities, and that it would fight the SEC’s enforcement efforts.

“After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our U.S. crypto business,” said Dan Gallagher, the company’s legal and compliance officer.

Robinhood in August issued a response to the notice, CEO Vlad Tenev told Bloomberg Television.

“We’ve spent a lot of time making sure that the response is as high-quality as possible,” Tenev said, declining to provide additional updates.

The post Robinhood Continues UK Expansion With Stock Lending appeared first on PYMNTS.com.