This week the Treasury Department published a statement announcing that it would solicit public input on online marketplace lending. The $12 billion industry has grown rapidly in recent years with nontraditional online lenders filling the void left by the drying up of smaller personal and business loans from traditional banks. The marketplace model ranges from peer-to-peer microlending and crowdfunding, to large investors, including big players such as LendingClub and Prosper. Analysts predict that marketplace lending will continue to grow by 47 percent annually for the next five years.
In the Treasury’s Request for Information (RFI), the agency is seeking input on the different business models and products offered by marketplace lenders, the ability of the industry to expand credit to underserved borrowers and “how the financial regulatory framework should evolve to support the safe growth of this industry,” suggesting that future rulemakings could be in store. In the statement, Antonio Weiss, Counselor to the Treasury Secretary said, “Innovation in financial services is creating new ways for consumers and small businesses to secure credit. By soliciting public comments on this relatively new industry, we hope to better understand the potential for online technology to expand access to safe and affordable credit for consumers and small businesses.”
- Treasury Statement: http://www.treasury.gov/press-center/press-releases/Pages/jl0116.aspx
- Treasury RFI: http://www.treasury.gov/connect/blog/Documents/RFI%20Online%20Marketplace%20Lending.pdf