On May 10, 2016, the U.S. Department of the Treasury (Treasury Department) released a whitepaper titled, “Opportunities and Challenges in Online Marketplace Lending” (whitepaper or report). The report, which was the product of interagency collaboration, comes closely on the heels of increased regulatory interest in online lending by the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB), among others. It summarizes responses to the Treasury Department’s July 2015 Request for Information (RFI), presents research on the industry, and issues a set of recommendations.
The report raises a number of important operational and credit risk issues highlighted by the more than 100 organizations responding to the RFI. It represents the Treasury Department’s views, though the Treasury Department acknowledges that it consulted with other agencies, and, as such, serves as an indicator of policy trajectories from the Federal government regarding supervisory expectations for this emerging market. Much of the report offers conceptual support for the market given its potential to expand access to credit to previously under-served consumers and small businesses. It also highlights the growing ties between online marketplace lenders and more traditional financial institutions.