According to official Anjan Mukherjee, the U.S. Treasury Department is in the early phases of an analysis of the online lending industry, sometimes called alt-lending.
This follows a July 2015 request for information, which has yielded hundreds of responses, according to Mukherjee.
“Just because we put an RFI out doesn’t mean we’ll end up with a rule,” Mukherjee noted during a presentation at a conference last week, according to Wall Street Journal reports. He also stated, however, that the Treasury might put together suggestions for lawmakers that could ultimately affect regulations.
Regulations that at present alternative lenders operate largely outside of as they are not banks. That non-bank status comes with many benefits; alt-lending is often touted as faster, more efficient and much more inclusive than bank-backed lending. This is particularly true for small business borrowers who have seen their access to credit sharply erode since the Great Recession kicked off in 2007–2008.
Mukherjee also noted that on the consumer lending side there tends to be competition — the people getting loans today could also be traditionally financed — but in SMB lending there is a potential “to serve small businesses that didn’t have access to … credit,” he said.
The main question about online lending, he noted, was sustainability, whether this form of lending can last in a different, perhaps more stressful, economic environment. It is also unclear how alt-lending will function when the Fed finally decides to let the interest rates in the U.S. go above zero.
Security and fairness were also primary concerns.
“We are cautiously optimistic about the growth of this industry,” he said.
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