The Consumer Financial Protection Bureau (CFPB) is starting to pay more attention to the increasing presence of online marketplace lenders and has begun accepting complaints from consumers experiencing problems. It also issued a bulletin with warnings.

“It certainly looks like it a shot across the bow, a signal to the industry than, ‘Hey, we are watching you,’” said Scott Pearson, a partner with Ballard Spahr which regularly monitors CFPB actions in a blog.

Pearson noted that online lending is becoming more common.

“There is a lot of capital coming into the space, and you are going to see more and more online lending,” he said.

Online marketplace lenders are relatively new in the market and are most active in debt consolidation, he said, but some also offer mortgages, auto and student loans.

“There has been a lot of stories in the press suggesting that there is some sort of a problem with online lending not being regulated, which is completely not true,” Pearson said. “There are a lot of laws that regulate disclosures, and other aspects of consumer lending. I really think that this is a signal that the CFPB, in particular, is paying attention to the industry and wants to make sure they are complying.”

People

Scott M. Pearson

Related Practice