Fintech – News and Analysis

Ohpen, a banking tech firm in the Netherlands that was the world’s first cloud native core banking provider, has announced that its first and long time investor, the investment management firm Amerborgh, has sold part of its shareholding to NPM Capital, which now has a 35% stake.

“We have had Ohpen in sight as one of the most promising technology companies that we have seen in the past few years,” said Rutger Ruigrok, managing director at NPM Capital. “We are impressed with their achievements over the past 10 years: a cloud native core banking engine, an impressive customer base and a wonderful foundation for further growth. The technology sector is an increasingly important focus point in our investment portfolio,” he added.

“Having the new shareholder on board means a broadening of our options to finance future growth, although Ohpen can still advance with the growth capital that we raised early 2018, says Matthijs Aler, CEO of Ohpen. “With Amerborgh and now also with NPM, we have a well-balanced long-term shareholder structure that enables Ohpen to realize all of its future growth ambitions. I am really looking forward to working with the NPM team.”

Ohpen was the first SaaS core banking engine in the world that runs entirely in the cloud, predominantly on AWS.. Ohpen liberates its customers from their legacy systems, making them more flexible, safe, scalable and compliant.

Last year Ohpen moved more than 400.000 savings and investment accounts from Aegon to its core banking engine. Ohpen also signed up LeasePlan Bank which will use its cloud-based engine to replace several on-premises applications, reducing complexity and increasing LeasePlan Bank’s technological and functional capabilities to better support its retail banking customers.

““In Ohpen we have found a partner that allows us to further increase our efficiency and enhance our capabilities to keep track of market developments and changing customer demand,” said Danny te Brinke, director LeasePlan Bank & Strategic Finance. “This will help us deliver on our commitment to bring user-friendly, clear and competitive savings products to our customers.”

Midnight on the 15th ended the CFPB’s comment period on its proposal to rescind the payday loan rule to protect borrowers that it had finalized in 2017.Pew said the CFPB rule on payday ending could save consumers billions.

“Pew is deeply concerned that the Bureau’s proposal to rescind the ability-to-repay provisions it finalized in 2017 will harm consumers and dissuade lenders from providing affordable credit at scale.”

Pew took issue with the Republican-controlled CFPB’s assertion that the rule developed under the Obama administration would restrict access to credit.

“The Bureau’s 2019 proposal neglected to account for the provision of installment loans and lines of credit in its assessment, repeatedly and incorrectly equating a reduction in the number of short-term balloon payment loans with a decrease in access to credit generally. In addition to continued payday and vehicle title lending, installment lenders, banks, credit unions and financial technology firms have said that they are also ready and willing to extend access to credit under the 2017 final rule, and they are likely to expand their small-dollar lending —something the Bureau failed to address.”

The Bureau’s 2019 commentary justifying revoking the rule is dishonest, Pew said, in somewhat more diplomatic language.

“The Bureau repeatedly paraphrased the rule’s language in ways that substantially change its meaning…The 2019 proposal has ignored the foundational rationale for the 2017 rule, failed to refute or reinterpret the bulk of research underpinning it, and has also mischaracterized the rule as being largely based on a concern about borrowers’ expectations at the time a first loan is originated….the 2017 rule’s safeguards provide a level playing field and regulatory certainty for lenders, along with strong protections for consumers, while maintaining widespread access to credit.”

The bureau’s action is not much of a surprise. Republicans have opposed the CFPB since Elizabeth Warren first proposed it. CNBC reported that “Since 2011, the CFPB has received more than 1.2 million consumer complaints about their dealings with financial firms. It has returned nearly $12 billion to 29 million people wronged by financial institutions, including credit card companies and banks. Most of the complaints received by the agency relate to debt collection (27 percent) and mortgages (23 percent).”

The billions saved or return come out of the profits of payday lenders and the money center banks which provide their funds while staying a long arm’s reach away from the payday business.