"Peer-to-Peer Lending and the CFPB" by Jon Kibbe and Julia Lu

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April 14, 2015

In "Peer-to-Peer Lending and the CFPB", which was released yesterday at the 2015 LendIt conference in New York City, Richards Kibbe & Orbe partners Jon Kibbe and Julia Lu discuss the importance of the CFPB’s “Payday Lending Proposal” and what it means for peer-to-peer lending platforms.  

On March 26, 2015, the CFPB announced that it is considering a framework of rules and regulations for “payday” and similar loans, and released a lengthy proposal designed to protect the most vulnerable consumer borrowers from debt traps. The CFPB Payday Lending Proposal seeks to regulate two broad categories of consumer loans: (i) “covered short-term loans” with a contractual maturity of 45 days or less, and (ii) “covered longer-term loans” with an “all-in” annual percentage rate in excess of 36%.

The Proposal provides peer-to-peer lending platforms with an early look at both the type of harm to consumer borrowers the CFPB is working to prevent, and the scope of the regulatory mechanisms that the CFPB may use in adjacent consumer credit markets.

Please click here to read the memorandum.