Comments on U.S. Department of the Treasury White Paper entitled “Opportunities and Challenges in Online Marketplace Lending”

SUMMARY

The Committee on Structured Finance (Patrick Dolan, Chair) sent a letter to the U.S. Treasury Department commenting on Treasury’s May 10, 2016 White Paper, “Opportunities and Challenges in Online Marketplace Lending.”  Noting the broad array of tools and techniques—including structured finance techniques—being used by “fintech” lenders, the Committee endorses Treasury’s recommendations, including: supporting more robust small business borrower protections and effective oversight; promoting a transparent marketplace for borrowers and investors; expanding access to credit for underserved borrowers; and facilitating interagency coordination to support responsible innovation, identify existing regulatory frameworks, coordinate ongoing regulatory efforts and monitor risks. The Committee also supports the development of formalized inter-agency working groups comprised of representatives of Treasury, the CFPB, the FTC, SEC, FDIC, Federal Reserve Board, Office of the Comptroller of the Currency, the Small Business Administration and other relevant bodies, and urges them to commission a comprehensive review of federal and state statutes and regulations that apply or may apply to online marketplace lending platforms as well as to banks, thrifts, third-party funding sources and other fintech service providers, with the goal of determining whether the existing regulatory framework is sufficient, if further regulation or oversight is needed, and to guard against over-regulation and duplicative or inconsistent rule-making.