Formal Regulation For A Loan Online Marketplace Lending Essay
This is a possibility because complaints received by the CFPB are often used to retroactively identify the problem-zones of contemporary markets. CFPB Director Richard Cordray commented on the move in the released bulletin:
When consumers shop for a loan online we want them to be informed and to understand what they are signing up for […] All lenders, from online startups to large banks, must follow consumer financial protection laws. By accepting these consumer complaints, we are giving people a greater voice in these markets and a place to turn when they encounter problems.
In a nutshell, online marketplace lending is a peer-to-peer service that links investors to loan applicants, providing “platforms” to connect consumers or businesses that wish to borrow money with investors willing to buy or invest in the loan. Inevitably such trade entails collecting personal data – e.g., bank account information, social security, phone number and address, etc. It doesn’t take much imagination to understand how bad things could get.
CFPB’s Moira Vahey confirmed this cursory sentiment when she spoke with us for a few minutes today. According to her, enacting this…