The US Department of Treasury (DoT) has issued a request for Information (RFI) on the lending practices of marketplace lenders that could impact up-and-coming online CRE lenders like FundRise, Realty Mogul or Prodigy Network.
The information gathering exercise is designed to support regulation of online lending platforms, create understanding of how the platforms make cheaper credit available, and to discuss potential risks.
The measure is understood to be a first step toward potentially tighter regulation an online market lending space without a current, dedicated regulatory body.
“Through this RFI, the Treasury is seeking to study the potential for online marketplace lending to expand access to credit and how the financial regulatory framework should evolve to support the safe growth of this industry,” an RFI notice said.
The office of Consumer Policy and Small Business Community Development and Affordable Housing Policy will review the responses, due 31 Aug.
The RFI asks 14 key questions including how platforms evaluate identity, credit and fraud risk based on electronically gathered data. There are also questions about the categorization of borrowers based on size and credit score, privacy of the parties involved, cybersecurity threats and consumer protection concerns.
The document also seeks to find out if the current regulatory regimes adequately cover risks and if industry participants have taken sufficient steps toward regulatory compliance. The notice also seeks information on the loan servicing, fraud detection, credit reporting and collections practices of online platforms and how they differ from those of traditional banks.