Marketplace lenders may have to provide more information about borrowers if anything comes from comments from U.S. Securities and Exchange Commission Chair Mary Jo White.
According to a report by Reuters, White said marketplace loans need to have enough information about the borrower’s ability to pay back the loans. What’s more, Reuters reported that White said the SEC is looking at how and when distributed ledger systems, like blockchain, will be introduced in equity markets. The SEC is also looking at what disclosures automated investment advisory services should make to customers. The report noted SEC Commissioner Michael Piwowar said the regional offices of the SEC could serve as centers for FinTechs to receive guidance on regulations.
The comments on the part of the SEC when it comes to marketplace lenders come at a bad time for the alternative lending industry. Investors have been backing away from these companies, regulation threatens to harm the industry’s growth and, according to a lot of analysts, the companies haven’t lived up to their expectations.
Nevertheless, that hasn’t stopped lenders from entering the space, with the newest being Plousio, which launched early last month. Plousio is going after the small business market, connecting lenders to small business borrowers. Plousio reportedly has more than 70 lenders already linked to its service. That launch was followed by Goldman Sachs’ launch of Marcus, its online platform offering unsecured personal loans to consumers. Named after Marcus Goldman, one of the firm’s founders, Marcus by Goldman Sachs provides consumers with a transparent and simple approach to consolidate their high interest credit card debt. With the service, borrowers can apply for a fixed rate personal loan of up to $30,000 for periods of two to six years. The service is currently being tested with select Goldman Sachs customers but eventually will be rolled out to a broader audience.