[Scott Williams]

Doesn't WEB BANK fund New Logic? So now WEB BANK is behind New Logic and Bill me Later?

[Finance1]

Doesn't WEB BANK fund New Logic? So now WEB BANK is behind New Logic and Bill me Later?

Yes, but the relationship is more about compliance than anything else. Fed charters make is much much easier to do the loan thing. OnDeck used metabank in certain states and now they switched to Bank of Internet. ARF used Mission Valley and some other bank I can't remember. New Logic had to expand asap on the heels of OD. Going at it without bank backing is a compliance nightmare in many States and it takes a long time to be able to offer all 50. It's a shortcut and the banks involved basically make money for "free".

[Capital Stack]

Scott, actually Webbank is a not an fdic but has an industrial bank charter in Utah. They don't fund anybody directly, but act as funder of record on loans for Newlogic, and others, because of loan regs. Their not actually the money but the servicing the loans.

[jbrown]

The issue with using a bank charter to service a product like ODC and New Logic is that those companies are now subject to regulatory review. The OCC and state bank regulators have, by extension, the right to review, audit and inspect any 3rd party relationships. So in theory the OCC could go to CAN or ODC offices for an audit. The regulatory bodies also have the right to tell the bank to terminate any 3rd party relationships at their discretion.

Scott, actually Webbank is a not an fdic but has an industrial bank charter in Utah. They don't fund anybody directly, but act as funder of record on loans for Newlogic, and others, because of loan regs. Their not actually the money but the servicing the loans.

[Capital Stack]

The issue with using a bank charter to service a product like ODC and New Logic is that those companies are now subject to regulatory review. The OCC and state bank regulators have, by extension, the right to review, audit and inspect any 3rd party relationships. So in theory the OCC could go to CAN or ODC offices for an audit. The regulatory bodies also have the right to tell the bank to terminate any 3rd party relationships at their discretion.

Great point JB