Cheap funding and marketing muscle could give it an advantage over existing lenders, but this corner of the market may not be big enough to move the needle for the bank.
David Nelms said that many digital lenders do not understand how to underwrite personal loans properly, and he took a dig at their lack of profitability. The upstarts say their industry's ability to attract capital speaks for itself.
Residents' low incomes usually disqualify them for standard student loan refinancings, but SoFi and other lenders describe these borrowers as strong credits with high earnings potential who could offset some of the risks lurking in student loan pools.
The marketplace lender's application for an industrial bank charter is under fire from small banks and progressives, who say it could violate the barrier between banking and commerce and shut out middle-class and lower-income consumers.
