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Investors Turn Wary on Consumer Debt - WSJ

By Matt Grossman and Matt Wirz
Originally Posted on April 11, 2022 in the WSJ, download the PDF or view the full article here.

Demand softens for bonds backed by loans from riskier borrowers, along with shares of fintech consumer-lending companies. Investors are growing more skittish about bonds backed by consumer debt, worried that inflation and slowing growth will increase the number of low-income borrowers falling behind on car payments or credit card. Buyers of bonds backed by subprime car loans or credit cards are demanding the highest premiums over interest-rate benchmarks since mid-2020. Meanwhile, investors have punished shares of some financial technology companies that helped fuel a recent surge in consumer borrowing, such as Affirm Holdings and Upstart Holdings.

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Debt Sales: Traditional Transactional Broker v. EverChain

Broker v Our Full-Service Debt Sales Approach

When lenders decide to sell their debt, they have options. Many choose to use a broker because they don't want to invest in the staff and the technology it would take to compliantly sell debt directly to a buyer. Sure, you could hire the staff, train them, and implement the technology – but that's a big lift. Because it's not just the technology expense upfront, but it's an ongoing expense to ensure that your technology doesn't just meet the needs of today's regulatory environment, but tomorrow's as well. You pay a broker a fee to cover the transaction, but it does not include compliance oversight – that still lies with you as the original creditor. 

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Why I Joined EverChain: Dan Green, Chief Revenue Officer

We sat down with EverChain's Chief Revenue Officer, Dan Green, to speak with him about why he joined EverChain. We wanted to understand the "Why" behind his passion, dedication and enthusiasm for EverChain.

Why I Join EverChain: "It’s rare to find a niche market with such a large unaddressed problem that had potentially catastrophic consequences to multiple parties. EverChain was not only the first company to identify it, but the only company that was actually solving this problem. If the problem was fascinating, EverChain’s solution was brilliant in it’s simplicity; focus on protecting the consumer during a debt sale. If you pour all your efforts into protecting the consumer before, during, and after a debt sale, you directly protect both the buyer and the seller. I knew then that this was a market moving concept and jumped in with both feet."

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