Peer-to-peer lending gets a new regulatory regime in the US
A fascinating development in the US as a new regulator for peer-to-peer lending appears following vigorous efforts from Prosper to promote an even handed regulatory regime for both borrowers and lenders. Currently the Securities and Exchange Commission (SEC) is the prime regulator, and a similar situation exists in Canada. The creation of the Consumer Financial Protection Agency (CFPA) is apparently designed to protect consumers in a host of financial services from p2p lending to reverse mortgages. Certainly more to come on that, but interesting for peer-to-peer lending.
“Once again, Representative Jackie Speier and Chairman Barney Frank are doing the right thing by putting consumers’ and investors’ interests first,” said Chris Larsen, Prosper Chief Executive Officer and Founder of the Coalition for New Credit Models. “In terms of how the Bill relates to peer-to-peer lending, we’ve always believed that the industry should be regulated as a bank-like sector by a strong, holistic regulator focused on providing robust protections for both lenders and borrowers. The Obama Administration and other leading policy makers have been calling for the nurturing of alternative, transparent, and durable credit markets that will benefit consumers and small businesses; this landmark Bill heeds that call.” Prosper, together with the Coalition for New Credit Models, has advocated that America’s economic future depends on new and alternative credit models being embraced in the same way green technologies are being nurtured by policy leaders to help solve the energy and environmental crises.