[Update: The Lend Academy response has been sent to the Treasury and you can read it all here.]
In a big step forward for marketplace lending, the United States Treasury has announced that they will be seeking public comment from our industry in an official Request for Information (PDF link). The 12-page document provides some background information and then asks for information based on 14 questions. Below is my summary of these questions:
- Explanation of the different marketplace lending business models and the regulatory concerns that each raise.
- How is big data and technology impacting marketplace lending today?
- What are the borrower segments and how are companies designing their business around each segment?
- Is marketplace lending expanding access to credit to historically underserved market segments?
- What marketing channels do platforms use to acquire customers?
- Explain the effectiveness and scope of the credit underwriting?
- How do platforms rely on traditional financial services?
- Explain the operational practices of platforms when it comes to loan servicing, fraud detection, credit reporting, and collections.
- How can the Federal Government help to facilitate positive innovation?
- Should platforms be required to have skin in the game?
- What are the risks and is the current regulatory environment adequately addressing these risks?
- Who are the investors and how are they investing in loans?
- What efforts are being taken to produce a functioning secondary market?
- What are other key trends and issues that policymakers should be monitoring as this market continues to develop?
There you have it. This is quite a complete list of topics, so the Treasury should have a good understanding of this industry by the time the comment period is over. Speaking of which, the comment period begins on Monday and we have 45 days to send in our comments. There is a special email address and hotline setup to handle inquiries about the process.
I think this is great news that the U.S. Treasury is being proactive here in soliciting feedback from the industry. In conversations I have had with people inside Treasury I have been impressed with their level of knowledge. They are engaged and knowledgeable about our industry already. With this feedback they should only become more so.
Lend Academy will be participating in the comment process and will share what we write in later posts. This news has been picked up by all the major news outlets today including The Wall Street Journal and The New York Times. And here is the official blog post from Treasury.
Government interest is never a positive. They will shake down the industry players and make it difficult for new companies to succeed. They will harass companies loaning to consumers and owner occupied homes.
Agree