CFPB Increases Scrutiny of Marketplace Lenders

The Consumer Financial Protection Bureau (“CFPB”) announced on Monday, March 7th, that it is now accepting consumer complaints relating to online marketplace lending. It also released a consumer bulletin designed to educate consumers who are shopping for such loans. CFPB officials said they want to ensure that consumers know that marketplace lenders are required to follow all relevant federal and state consumer protection laws. "When consumers shop for a loan online we want them to be informed and to understand what they are signing up for…" CFPB Director Richard Cordray said in a press release.

The CFPB's press release defined a marketplace lender as a firm that "uses an online interface to connect consumers or businesses seeking to borrow money with investors willing to buy or invest in the loan." Some industry participants said the CFPB's bulletin suggested the agency may be skeptical of this young industry, while others welcomed the CFPB's actions.

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