The Dollar & Cents of Loan Participations - vfccu.org and Outs of Loan Participation.pdf · Ian...
18
Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC. ® The Dollar & Cents of Loan Participations
Transcript of The Dollar & Cents of Loan Participations - vfccu.org and Outs of Loan Participation.pdf · Ian...
Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
®
The Dollar & Cents of Loan Participations
Ian Lampl
CEO, LoanStreet LLC
Deputy Chief Counsel, Office of Financial Stability – TARP
Secretary’s Honor Award for Exemplary Public Service during the Financial Crisis
Corporate & Litigation Attorney at Cravath, Swaine & Moore LLP
JD, honors, University of Chicago Law School
BSE, cum laude, Electrical Engineering, Princeton University
2 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
Current Loan Market
Significant year over year loan growth for nearly 3
years
3 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
“Credit union loan-to-savings ratios
will approach 86% by year-end 2016,
the highest since 1980. At that point
loan growth will slow to the pace of
deposit growth.“
-CUNA Mutual Group
Current Loan Market
4 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
Uneven loan growth among CUs, with lending primarily occurring at larger CUs
Need to match loan growth to deposits; otherwise opportunities leave the credit union market
Loan Participation Benefits
If credit unions could efficiently participate loans, they
could maximize the industry’s lending capacity, support
small credit unions, and increase the industry’s market
share.
5 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
Seller Benefits
Generate premiums & servicing income
At a 50 bps spread, every $10mm principal
outstanding equals $50,000 servicing income per year
For every $10mm principal sold, each point of
premium equals $100,000 in premium income
6 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
Buyers Benefits
Generate more interest income
4 point spread between loans to
investments
Every $10mm in principal
purchased equals $400,000 in
additional interest income
7 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
Economically Wasteful Market Practices
Intensely manual & economically wasteful process:
Individually negotiated participation agreement
Due-diligence scattered in multiple locations
Manually distributed payments
Insecure & inefficient emails & document storage
Ad-hoc reporting & monitoring that fails to meet regulation
8 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
Current Results
Avoided as much as possible
Upside gains wasted
Smaller purchasers boxed-out of market
Not a real and reliable source of liquidity
9 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
Automation & Standarization
Continue to meet member loan demand
Keep the economic benefits of loan participations rather than wasting resources
Participation by smaller credit unions (where much of the remaining liquidity sits)
Create a real and reliable source of liquidity
10 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
LoanStreet’s Solution
Cost-Effective Initial Distribution
Best-in-class participation agreement
Efficient due diligence tools
Broad credit union distribution that you control to find best liquidity sources
11 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
LoanStreet’s Solution
Cost-Effective On-Going Administration
Automated reporting & monitoring
Automated payment distribution
Simplified regulatory compliance
12 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
Reporting
LoanStreet distributes reports to each buyer in a standardized form, providing:
Portfolio-level review for buyer & seller
Borrower payment “waterfall” for buyer & seller
Loan-level monitoring
Downloadable at anytime & from time to time 13 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
With a single payment, LoanStreet will
disburse borrower payments to all your
investors across all your loans, vastly
simplifying payment distribution.
Payment Distribution
14 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
Search – Buy – Manage
Search by loan and
institutional metrics
Buy directly on platform with
standard agreements
Manage all loans across
lenders on one platform
15 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
Fees & Services
LoanStreet Technology Fee
10bps on the unpaid principal held by buyer at time of sale
and then on each anniversary on remaining amount
Pricing & Placement
Typically 15 bps on amount sold: Auto & Resi
Higher fees for more difficult product: CRE & Student
16 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
For more information, please contact your
Corporate Account Manager or the PCUA.
Mid Atlantic & PCUA Contacts
17 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
LoanStreet Contact
Ian Lampl, CEO
646.780.0920
Chris Wu, COO
646.780.0921
18 Patent Pending. LoanStreet® is a registered trademark of LoanStreet LLC.
