American Banker interviewed Manatt's Brian Korn, a partner in the firm's Capital Markets practice, for an article on how the Securities and Exchange Commission's update to an obscure 1930s rule opens up new avenues for alternative online lenders and community banks to raise capital.
American Banker reports that banks and bank holding companies that do not currently report to the SEC may now raise up to $50 million without going public or asking permission from state regulators. And marketplace lending platforms can now offer their loans as investments to a broader range of individuals, potentially restoring that business' "peer-to-peer" roots.
"For community banks, certainly this is a boon," said Korn.
Still, "You're not going to see the floodgates opening up," the same way one would with an initial public offering, Korn said, but it does open another major route for alternative lenders to raise capital and grow.