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CFPB Brings P2P Lenders Under its Radar

The US Consumer Financial Protection Bureau (CFPB) has put Peer-to-Peer (P2P) lenders under a strict review process. CFPB would closely monitor the complaints filed against marketplace lenders and forward the complaints to the respective lenders to get a response within 15 days. The acceptance of consumer complaints under this regulation will provide a space to consumers to raise their concerns whenever they face any issues with regards to P2P transactions.

Being still in nascent stages, P2P lenders do not have strict government regulations as compared to banks and credit unions. Also, the industry is growing at a rapid pace. According to a Morgan Stanley estimates, marketplace loan originations have grown from about US$1 billion in 2010 to US$12 billion in 2014. This growth is attracting the attention of regulators, who are more concerned about consumer data protection and regulatory compliance. As a result, CFPB is taking a step ahead to ensure consumer protection. CFPB indicated that it plans to build an infrastructure to intake and analyze small business lending complaints in the initial phase of the review process.

News Characteristics

Date : Mar 17, 2016
Region : North America
Industry : Banks
Function : Regulation and Compliance
Sub-Function : Regulatory changes