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Bank Notes: Enova Renews Credit Agreement, Lends Support for CFPB's SBREFA Proposal

Adam Rust's picture

Posted April 2, 2015

Enova renews its credit facility, but at a reduced level. On Monday, Enova released a statement indicating that it reached an agreement with its lenders to extend its credit facility. The unsecured line was reduced from $75 million to $65 million.  That was paired with an increase it Enova's senior secured debt by an additional $5 million. 

Separately, Enova stepped out to say that it supports the CFPB's proposed SBREFA proposal for the regulation of payday lending.

Enova International, Inc., a leading technology and analytics company focused on online lending, announced that it supports the Consumer Financial Protection Bureau (CFPB) efforts to provide a well-regulated market for consumers who need access to short-term credit.

This would seem to support several conclusions about the impacts of the proposal:

a) The cap on repeat unauthorized payments is not going to be a problem for Enova. 

b) Enova sees this as an opportunity to take market share away from the tribal lenders. 

c) Enova believes that they will be able to assess ability-to-repay. It is easy to imagine that a storefront could ask to see a variety of statements before making a loan. It seems harder to do so over the internet. After all, not many people are going to have the wherewithal or the inclination to scan and upload their latest cable and utility bills. This means that Enova believes that it can do so on its own, perhaps through a highly sophisticated big data approach. 

d) Commerical lenders are equally unphased by the CFPB's proposal, at least with regard to state-licensed online lenders who derive the majority of their revenues from unsecured installment loans.