Consumer lending

A majority of midsize and large banks complain that red tape is mounting and that they are passing on higher regulatory costs to customers and have less flexibility in designing products, according to a new survey by the RMA.

Some investors fear BBVA is taking a big risk by getting into unsecured personal lending long after online lenders have established themselves, but bank officials argue the bank’s cost of funds and in-depth knowledge of its customers will help it to outdo the competition.

The San Francisco-based online lender reported a net loss of $115 million for 2017, more than half of which was connected to warrants issued in a deal that stabilized the struggling firm.

Banks say that an appeals court’s decision to ease restrictions will allow them to warn customers more easily when loans are past due or accounts have been compromised. But consumer groups argue that the decision gives financial firms license to market their products more aggressively and could lead to more harassing phone calls over unpaid debts.

As it expands to the West Coast, the bank will first target car dealers at which it is already an indirect consumer lender.