“In light of the growth of this segment, Treasury is interested in learning more about the business models and product offerings of online marketplace lenders; the potential for online marketplace lending to expand access to credit to historically underserved market segments; and how the financial regulatory framework should evolve to support the safe growth of this industry"
Mr. Weiss struck a positive tone when outlining the Treasury’s stance on the industry, which he claimed originated $14 billion new loans last year, whilst also making clear the Treasury's desire to protect consumers and SMEs:
“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.”
The 12 page document includes concerns over what measures platforms have to protect against fraud and hacking and whether legislation should force borrowers to have security on their loans.
Jaret Seiberg, analyst at Geggenheim Securities, highlighted the implied support for the industry:
"The announcement clearly suggests it [the Treasury] sees value in the industry"
P2P lending markets have perhaps enjoyed a lighter level of regulation than in alternative equity markets - which has largely stifled the market potential for US equity crowdfunding. Whilst results will not be published for a while, the public can submit comments for 45 days from the 20th of July, and it will be interesting to see how far regulators feel they need to go in order to ensure a successful, but sustainable industry.
