Q4 2024 Consumer Lending
Cole Gottlieb, Research Analyst
We come to you today with our quarterly consumer lending review. Catch up on the latest trends emerging in the consumer lending space.
Takeaways from nonbank and bank earnings:
- Originations
- Charge-offs
- Deposits
- And an increase in MPL new issue volume
New here? Subscribe to receive our newsletter each Sunday.
Missed last quarter’s report? Recap key trends with my Q3 Consumer Lending Review.
Consumer Lending Origination Growth Surges
Originations
In the fourth quarter, lenders capitalized on consumer demand for credit, reporting robust YoY origination growth across lending products (BNPL, cash advances, higher-APR (36%+ APR) loans, personal loans). Demand, paired with rate cuts and the continued strength in consumer credit, helped drive originations.

In Q4, Upstart’s (+68.2%) YoY origination growth accelerated, driven by demand for personal loans. Upstart attributed its growth to an update to its underwriting model (Model 18), paired with product wins and a macro tailwind. These factors helped to drive an increase in Upstart’s conversion rate (approving more loans) to 19.3%, from just 11.6% a year prior.
SoFi reported similar origination growth, up +66.1% YoY on demand for personal loans. SoFi’s originations have been helped by the expansion of its loan platform business (“LPB”). CEO Anthony Noto explained, “We partner with buyers like Fortress to originate loans fitting their predefined criteria, and we earn fee income as we fill the orders. These loans are originated on the buyer's behalf, so they don't sit on our balance sheet. And importantly, we keep the servicing rights.” Its LPB has helped drive originations, accounting for nearly 10% of full-year 2024 originations.
As chartered banks, SoFi and LendingClub have leaned into noninterest (fee) income. SoFi management has stated that it aims to take less balance sheet risk by focusing on financial services and tech platform accounts as well as its loan platform business. LendingClub has derived a growing % of its net revenue from non-interest income (+38% YoY) compared to interest income (+8% YoY). Its non-interest income was driven by the growth in origination volumes and improvement in loan sales prices due to strong buyer demand, with loan sales prices up +170bps YoY.
LendingClub +13.3% posted solid YoY origination growth. Notably, bank buyer demand for LendingClub’s loans returned, with banks purchasing one-third of its volume in the fourth quarter, compared to just 5% to start 2024.
OneMain +16.3% reported double-digit YoY origination growth for a second straight quarter, breaking the trend of several quarters of YoY declines. The lender has continued to grow its line of BrightWay credit cards, adding 103k new accounts during the quarter, and increasing credit card receivables to $643Mn.
Oportun +19.4% returned to YoY origination growth after a long stretch of YoY declines due to credit tightening efforts. Even as the lender has returned to growth, credit has continued to improve with 30+ day DQs declining on a YoY basis for a fourth consecutive quarter and NCO ratios improving. Oportun’s portfolio yield edged up +150bps YoY to 34.2%, nearing its 36% APR cap, but Fed rate cuts and its expansion into secured personal loans allowed for continued origination growth. The secured personal loans are secured by the borrower’s car title. CEO Raul Vazquez explained that secured personal loans offer the lender superior unit economics, with lower loss rates and higher revenue per loan than unsecured personal loans.
While personal lenders reported recent strong origination growth, LendingClub (40.1)%, Oportun (15.7)%, and OneMain (4.9)% continue to lag behind pre-pandemic (4Q19) volumes.
Lenders that offer shorter-term cash advance products continued their streak of robust origination volume growth, with Dave +44.1% YoY and MoneyLion +32.5% YoY. Dave and MoneyLion reported YoY origination growth north of 30% in every quarter of 2024, as consumers, facing a high cost of living and sustained inflation, have turned to cash advance products to bridge the gap between paychecks.
At long last, Dave revealed that it has partnered with Coastal Community Bank and plans to transition all its customers to Coastal in the next 12 months. Dave had been publicly searching for an additional partner bank since late 2023. Current partner Evolve Bank & Trust received a cease-and-desist from the Fed, was subject to a data breach, and is entangled in the ongoing Synapse bankruptcy process.
In addition to a new bank partner, Dave has rolled out a new fee structure, scrapping its optional instant transfer fees and tips model, which had drawn FTC complaints. The new, standardized fee structure charges the greater of 5% or $5, with a $15 cap on fees.
Gen Digital announced in December it would acquire MoneyLion for approximately $1Bn. The deal represents a premium to the prior day’s close ($850Mn market cap), but below the $2.4Bn valuation it held when it went public in 2021 via SPAC. Gen Digital owns and operates cybersecurity brands such as Norton and Avast.
Moving on to BNPL-focused lenders, volumes continued to surge, with Sezzle’s Underlying Merchant Sales (“UMS”) +42.1% and Affirm Gross Merchandise Volume (“GMV”) +35.4% YoY. Both UMS and GMV measure sale/transaction volume on the company platforms, but do not represent revenue earned. The two fintechs were helped by greater consumer engagement, with Sezzle’s annual consumer order frequency at 14.1x, up from 10.2x a year prior, and Affirm’s transactions per active consumer up to 5.3x, from 4.4x a year prior.
The Affirm card continued to gain momentum, reaching 1.7Mn active cardholders at quarter end, up +20% QoQ, and card GMV increasing to $845Mn, up +113% YoY and +39% QoQ. Affirm launched in the UK in late 2024 and announced a partnership with Sixth Street to invest $4Bn in capacity to buy Affirm loans.
Sezzle and Affirm continued to expand their methods of distribution, with Sezzle launching “Sezzle On-Demand” and Affirm announcing a partnership with FIS. Sezzle On-Demand allows any consumer to use the Sezzle Platform at any merchant online or in-store (via a virtual Visa card) in exchange for a one-time service fee (finance charge). Affirm announced it is teaming up with core banking provider FIS to make its financing options available via FIS’ debit issuing bank clients. Banks that opt-in will be able to offer functionality comparable to Affirm’s debit card, which enables users to select qualifying transactions after the fact and convert them into pay-in-four or longer-term financing plans.
Second-look financing fintech Pagaya has benefitted from the BNPL boom. The company reported a +9.4% increase in network volumes YoY, driven by personal loan, auto, and point of sale (“POS”) businesses. Much of Pagaya’s POS volumes can be attributed to Klarna, a leader in the BNPL space. Under its partnership, Pagaya’s decision engine is integrated into Klarna’s user experience to take a “second look” at rejected applications. If Pagaya can approve any rejected Klarna applicants, it funds the loans via capital from its ABS investors. Despite growing its volumes, the fintech maintained average conversion rates below <1%.
Higher-APR lender Enova (offers unsecured installment and lines of credit with APRs 34-200+% depending on state and product type) reported a +20.3% YoY increase in originations and a +20.8% YoY increase in consumer originations. The lender reported robust growth in originations, even as marketing expenses as a percent of revenue remained stable. Enova attributed demand and credit performance in its consumer business to jobs and wage growth.
OppFi, another higher-APR lender (average yield of 130%) grew originations by +11.4% YoY due to “bank partners’ expansion into additional states, increased demand through certain marketing partners, and enhanced lead evaluation capabilities driving higher quality applications”. The lender extended its asset-based facility with Blue Owl Capital and continued to improve its auto approval percentage, up to 79% of loans, from 73% a year prior.
Despite a rise in net charge-offs, banks have largely continued to grow their consumer loan books, driven by credit card loans. On a YoY basis, average consumer loan books grew +6.9% at Citi, +1.1% at JPMorgan, and +0.8% at Bank of America but were (1.6)% lower at PNC and (3.6)% lower at Wells Fargo.
At Citi, consumer loan growth was driven by retail banking +15.3% and branded cards +6.1%. While Wells Fargo’s average consumer loans declined YoY due to auto, home, and personal loans, its credit card loans grew +9.6%.
Charge-Offs
Moving on to credit, we saw YoY improvements in net charge-off ratios for nonbanks as well as for LendingClub, Ally, and Citizens. At the same time, the majority of incumbent banks reported YoY rises in net charge-off (“NCO”) ratios.


Despite serving a clientele more prone to delinquency, OppFi (500) bps and Enova (500) bps improved their NCO ratios YoY. OppFi pointed to its Model 6 credit model and new customer initiatives as drivers for improved credit quality. Strong jobs and wage growth have continued to support Enova’s credit quality.
Oportun (60) bps and OneMain (7) bps reported YoY improvements in their NCO ratios, helped in part by the reduction in the size of their “back books”. As a reminder, Oportun’s back book consists of loans made prior to their July 2022 credit tightening efforts and OneMain’s consists of loans made prior to their August 2022 credit tightening efforts. Oportun also cited its new V12 credit model as a driver of improved NCO rates, which were the lowest since 3Q22.
Oportun +27 bps and OneMain +19 bps NCO ratios have risen above pre-pandemic (4Q19) levels.
Turning to banks, LendingClub (210) bps, Ally (18) bps, and Citizens – Consumer (3) bps improved their NCO ratios YoY while Synchrony +87 bps, Capital One +38 bps, JPMorgan – Consumer +29 bps, Bank of America – Consumer +27 bps, Wells Fargo – Consumer +9 bps, and PNC – Consumer +4 bps reported increases in NCO ratios.
(40) bps worth of LendingClub’s improvement in NCO ratio can be attributed to the benefit of higher recoveries due to proceeds from a larger than usual sale of previously charged-off loans.
While Synchrony reported an increase in its NCO ratio, its 30+ DPDs declined (4) bps YoY and management expects that credit actions it took from mid-2023 to early 2024 will help improve NCOs. CFO Brian Wenzel noted that Synchrony expects a 5.8-6.1% NCO ratio range for 2025, that they do not see cracks emerging in the consumer, and that people making minimum monthly payments have risen significantly from 2019 across all risk grades.
Capital One’s rise in NCO ratio was driven by its credit card portfolio, with its credit card NCO ratio up +69 bps YoY. However, it should be noted that the end of its Walmart loss-sharing agreement contributed to the rise in domestic card charge-offs, increasing the Q4 domestic card charge-off rate by ~40bps.
Additionally, many bank consumer divisions’ net charge-off ratios have risen above pre-pandemic (4Q19) levels, with Synchrony +130 bps, Capital One +99 bps, Ally +68 bps, Bank of America – Consumer +39 bps, and JPMorgan – Consumer +18 bps. Citizens – Consumer (8) bps came in slightly below pre-pandemic (4Q19) levels.
PNC’s NCO ratio came in (28) bps lower than pre-pandemic (4Q19) levels but the bank has grown home equity + residential real estate loans as a % of its consumer loan book from pre-pandemic levels. Looking at broader industry data, these types of loans have carried lower delinquency rates than credit card and auto loans and likely translate into lower net charge-offs.

Bank net-charge offs (in $ values) followed a similar trend, with LendingClub (44.3)%, Ally (12.8)%, and Citizens – Consumer (9.8)% posting YoY declines in NCOs. JPMorgan – Consumer +26.1%, Bank of America – Consumer +21.8%, Synchrony +18.5%, Capital One +13.9%, and PNC – Consumer +8.9% posted YoY increases in NCOs. Looking at pre-pandemic figures, net charge-offs at consumer divisions eclipsed 4Q19 figures for Ally +87.2%, Capital One +71.4%, JPMorgan – Consumer +52.2%, and Synchrony +49.8%. Only PNC – Consumer (18.7)% and Citizens – Consumer (3.2)% reported declines in net charge-offs.
Deposits
In the fourth quarter, the Fed continued to cut rates, and the rate of yield-seeking behavior continued to moderate. Major bank consumer divisions reported mixed average deposit performance, with Bank of America +0.8% QoQ, Wells Fargo flat QoQ, and JPMorgan (0.3)% QoQ.
At the same time, we saw deposits grow QoQ at SoFi +6.4% and Capital One +2.6% but decline QoQ for Citizens (0.2)% and LendingClub (4.1)%. SoFi’s savings deposit growth of +10.7% QoQ outweighed declines in demand and time deposits. LendingClub launched LevelUpSavings, its high-yield savings product in Q3, which has garnered close to $1.2Bn in deposits to date.
Since obtaining bank charters, SoFi and LendingClub have benefitted from a lower cost of funds, with deposits remaining key to funding loans. While SoFi and LendingClub do not rely solely on deposits, being able to fund at a cheaper rate (SoFi 3.80%, LendingClub 4.33% average yield on interest-bearing deposits) aids profitability. By reducing warehouse utilization, SoFi achieved a 193 bps lower rate which translates to roughly $500Mn in annualized interest expense savings.
While not a direct comparison, nonbank lenders that utilize other sources of funding (e.g. warehouse lines, ABS markets) have reported significantly higher cost of funds, with Enova’s cost of funds at 9.1% and Affirm’s at 7.2%.
The cost of deposits has eased at banks, driven by Fed rate cuts, with the cost of deposits declining (46) bps at LendingClub, (39) bps at SoFi, (31) bps at Citizens, (20) bps at Synchrony, (18) bps at Capital One and (18) bps at Wells Fargo – Consumer.
In March, FDIC withdrew its proposed rule related to brokered deposits. The decision was widely expected, given the change in administration and FDIC board composition. As a reminder, in the wake of last year's regional banking crisis and the still-unfolding Synapse bankruptcy, the FDIC board voted 3-2 to issue a proposed rule that would effectively reverse the changes made in 2020 to brokered deposit rules. Brokered deposits, sometimes referred to as "hot money," are funds placed with a bank by a third-party agent or broker. Because they are perceived to be higher-risk, brokered deposits carry a higher deposit insurance assessment, and there are restrictions on banks that are less than well-capitalized on using such funding. Additionally, the proposed rule may have affected the classification of many BaaS deposits.
MPL New Issue Volume Surges
In the fourth quarter, new issue volume for the consumer unsecured MPL market jumped +98.5% higher on a YoY basis and +7.9% higher on a QoQ basis. The YoY increase in new issue volume was driven by both an increase in deals (16 vs. 11) and in average deal size ($375Mn vs. $275Mn).

Pagaya - $1,374Mn, Affirm - $736Mn, GreenSky - $665Mn, Republic Finance - $450Mn, GoodLeap (LoanPal) - $378Mn, Lendmark - $308Mn, Upgrade - $299Mn, Oportun - $275Mn, Regional Management $250Mn, Stream Innovations - $239Mn, Upstart - $208Mn, Achieve - $186Mn, Octane Lending - $126Mn, and Americor - $106Mn were among the most active players in the space in the fourth quarter.

2024 cumulative new issue volumes benefited from strong Q4 results to end the year 39.6% higher than 2023. In addition, 2025 volumes have gotten off to a hot start, with cumulative new issue volume through February of $4,033Mn outpacing 2024 levels by 51.7% and 2023 levels by 61.3%. An increase in average deal size ($448Mn for Feb. 2025 YTD vs. $295Mn for Feb. 2024 YTD, with 9 consumer unsecured ABS issuances in both periods) drove volumes higher to start the year.
Found value in our Q4 report? Subscribe here to receive our newsletter each Sunday.
New here? Subscribe to get the latest from Cross River. For even more updates, follow us on LinkedIn.
Disclaimers
All content is original and has been researched and produced by Cross River Bank (“Cross River”) unless otherwise stated herein. No part of this content may be reproduced in any form, or referred to in any other publication, without the express written consent of Cross River.
Cross River is not a broker-dealer or investment adviser and as such, this information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any investment in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change. This content does not constitute an offer to sell or the solicitation of an offer to sell or buy any security in any jurisdiction where such an offer or solicitation would be illegal. There is not enough information contained in this content to make an investment decision and any information contained herein should not be used as a basis for this purpose.
This content does not constitute a recommendation or take into account the particular investment objectives, financial situations, or needs of investors.
Investors are not to construe this content as legal, tax or investment advice, and should consult their own advisors concerning an investment in any instrument. The price and value of assets referred to in this content and the income from them may fluctuate. Past performance is not indicative of the future performance of any instruments referred to herein. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments.
Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on Cross River’s views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements. In addition to statements that are forward-looking by reason of context, the words “may, will, should, could, can, expects, plans, intends, anticipates, believes, estimates, predicts, potential, projected, or continue” and similar expressions identify forward-looking statements. Cross River assumes no obligation to update any forward-looking statements contained herein and you should not place undue reliance on such statements, which speak only as of the date hereof.
Although Cross River has taken reasonable care to ensure that the information contained herein is accurate, no representation or warranty (including liability towards third parties), expressed or implied, is made by Cross River as to its accuracy, reliability, or completeness. You should not make any investment decisions based on these estimates and forward-looking statements.
There is no guarantee that the market conditions during the past period will be present in the future. Rather, it is most likely that the future market conditions will differ significantly from those of this past period, which could have a materially adverse impact on future returns.
NO REPRESENTATION IS BEING MADE THAT ANY INVESTOR WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. We selected the timeframe for our analysis because we believe it broadly constitutes the most complete historical dataset for the industry or company that we have chosen to analyze.