In a recently released report on non-bank financials, fintech and innovation, the U.S. Treasury continued to show support for non-traditional financial markets and marketplace lending. The report included over 80 recommendations, many of which regulatory changes that would accommodate advancement in new financial technology products and services.
RK&O partner Vincent Basulto addressed the portion of the report that emphasized the importance of marketplace lending in expanding access to credit for consumers and businesses in the US, specifically in light of recent court cases that have created more confusion that clarity. “It’s helpful to have the support of the government behind the sector and it provides further momentum behind a resolution for the Madden vs Midland issue. It was hoped originally that it would resolve itself naturally over time, but it has since become ingrained in law," he said.
He also continued: “People are now coming to the conclusion that there needs to be a cohesive push, including from Congress, to get the issue resolved in a collaborative fashion, on a national level. It still remains the major regulatory issue in the sector and the status quo doesn’t benefit lenders or consumers. There is generally a feeling in the report that there needs to be some degree of harmonisation and a streamlined approach to regulating the sector.”
"Madden resolution urged" - Structured Credit Investor (registration required)