Back in March CommonBond closed a $50 million Series D investment that was led by the venture capital arm of Fifth Third Bank, a top-25 bank (by assets) based in Cincinnati, Ohio. Today, we are seeing some of the fruits of that strategic partnership as both companies announce the launch of student loan refinancing for Fifth Third Bank customers.
I caught up with CommonBond CEO David Klein briefly today to talk about this deal. The first thing he said is that this is a co-branded offering between CommonBond and Fifth Third, it is not a white label solution. Until today, Fifth Third Bank had no offering for student loan refinancing and today they have a dedicated page explaining this new partnership. On that page interested customers can click through to a CommonBond landing page and from there they go through the standard CommonBond funnel when applying for a loan.
So, what you have in effect is a large, captive distribution channel for CommonBond who will be sharing some of the economics of these converted leads with Fifth Third. But David was quick to point out that this is just phase one of what will eventually be a much deeper multi pronged relationship. Here is what he had to say in the official press release:
With this partnership we are combining the best of financial technology and banking to make personal finance better for consumers. Both companies value delivering great financial products to customers, building long-lasting brands that matter, and having outsized impact on communities across the U.S.
There has been a flurry of new bank-fintech partnerships announced in the second half of the year but this is one of the first in the student loan space. The reality is that the student loan problem is massive and getting bigger every year. Anything that can be done to relieve at least some of the debt burden should be encouraged. I think every bank will eventually have some kind of student loan offering given the size of the problem. Fifth Third is one of the early adopters here and I expect it will work out well for both them and CommonBond.