The Consumer Financial Protection Bureau (CFPB) plans to begin supervising online “peer-to-peer” or “platform” lenders as soon as late 2017, according to the Wall Street Journal.
The Journal reported that this oversight is part of the agency’s previously announced intent to monitor the largest lenders offering small-dollar loans and lenders that offer loans secured by vehicle titles. The CFPB could expand its proposed coverage by broadening the definition of “installment” lending, the report said.
In early March, the CFPB began accepting consumer complaints regarding online marketplace lenders. It also released a consumer bulletin with tips and advice regarding online borrowing.
When it released the bulletin, the CFPB noted that millions of American consumers are receiving personal loans from online lenders. Such lending allows borrowers to obtain loans from investors with a lending platform conducting the administrative tasks of underwriting and interacting with the borrower.
The CFPB’s bulletin emphasizes that, like “traditional” lenders such as banks, marketplace lenders are required to comply with federal and state laws, including those enforced by the CFPB and the Federal Trade Commission. The addition of CFPB supervision authority would give the agency authority to review the data and operations of a marketplace lender without pursuing an enforcement action.