The void created by the Dodd-Frank Act’s tougher requirements that prevent banks from making risky loans is being filled by nontraditional lenders, such as insurance companies, debt funds and niche companies more willing to take on risk.
“Regulated banks in particular are subject to more stringent rules, including capital requirements,” said Gregg Loubier, partner Alston & Bird’s Finance Group. “Many nonbank lenders [can] be more flexible with their underwriting standards.… They’ll be able to provide more capital or allow other lenders in the capital stack.”
“Regulated banks in particular are subject to more stringent rules, including capital requirements,” said Gregg Loubier, partner Alston & Bird’s Finance Group. “Many nonbank lenders [can] be more flexible with their underwriting standards.… They’ll be able to provide more capital or allow other lenders in the capital stack.”