Response to Online Marketplace RFI.pdf

This comment letter responds to the Treasury’s request for information about online marketplace lending, in particular how financial regulatory framework should evolve to support safe growth of the industry. The letter acknowledges that current online lending market has many similarities to consumer small dollar lending before many states passed regulations to limit the most abusive practices. The letter urges regulators to consider the fact that many small business owners are consumers in many respects and require the same level of protections from predatory lenders. We encourage regulators to promulgate rules including: risk retention requirements for lenders, strong underwriting and ability-to-repay requirements, and full disclosure of terms and fees. We also urge regulators to avoid creating loopholes that allow lenders to evade state or federal laws. We commend certain lenders for their recent creation of a the Small Business Borrowers Bill of Rights, but do not see self-regulation as adequate in this fast-growing market.