The image in this photo shows the logo of the US high-tech company “Block” and reflected on many digital screens on March 3, 2023 in London, UK.
Leon Neil | Getty Images
As stocks fell more than 30% this year and earnings growth slowed, Jack Dorseys block The loans are getting bigger.
The company said Thursday it would secure approval from the Federal Deposit Insurance Corporation to send loans through its bank subsidiary Square Financial Services, and could directly provide small consumer loans, rather than relying on external bank partners.
This is an expansion of the company’s short-term loan product, Cash App Remoll. But it comes at a time of growing concern surrounding consumer credit. President Trump’s vast tariffs and widespread government job cuts raise the story of a potential recession.
While trading losses in the block lending segment increased 39% in the last quarter, the company claims its underwriting model is strong, small dollar lending is inherently dangerous.
“Cash App Rourne is designed to provide short-term cash flow in a simple and accessible way when alternatives are expensive and difficult for consumers to navigate,” Block said in a press release. The company added that the average cash app borrowing loan is under $100 and the term is around a month.
Brock did not immediately provide a comment.
Block said it can offer products across the country when it obtains approval to run its lending business from its own bank.
Last month, Brock reported quarter results that missed Wall Street expectations. The stock price plunged at 18%, the worst day drop since 2020.
Around the same time, Block deployed afterpay, bought now and paid for later products with a cash app card. Chief Financial Officer Amrita Ahuja told CNBC that the launch was intended to provide customers with more credit options and placed a cash app as a bank replacement for some customers. Block got dad after competing positive$29 billion in early 2022.
Also, this week, Block announced a major investment plan for artificial intelligence.
The company said it will be rolling out on Wednesday. nvidia’s AI systems with the latest Blackwell chips A system for powering open source AI research. Block did not state what it was specifically trying to achieve through AI buildout, but in a press release pointed out that it would “begin exploring new solutions for our customers.”
Monitoring: Block stocks fall after earnings
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