FTC Joins Calls for Better Regulation of Marketplace Lending
Recurring Theme: Market Transparency
Yesterday, Thursday, June 9, 2016, the Federal Trade Commission (FTC) hosted a half-day forum as part of its FinTech Series to consider the consumer protection implications of marketplace lending. The FTC joins a growing number of regulators increasingly concerned about the limited regulation and supervision of online lenders. Most notably, the Consumer Financial Protection Bureau (CFPB) has begun collecting consumer complaints related to marketplace lending and is considering other ways to enhance oversight. The Treasury Department recently published a white paper on the subject as well.
In response to new regulatory scrutiny, the marketplace lending industry has proposed new plans for self-regulation. FTC Director of the Bureau of Consumer Protection, Jessica Rich, found fault with the approach at yesterday’s event. She said, “To be meaningful, these types of efforts need robust procedures to monitor compliance and tangible consequences when the rules aren’t followed…otherwise, you can’t be sure that companies have the incentives to comply.” Rich’s rhetoric suggests that despite the industry’s efforts, which include the new formation of the Marketplace Lending Association, regulators don’t intend to leave this emerging space ‘as is.’
FTC FinTech Series: Marketplace Lending: