December 22 – The California Department of Business Oversight has launched an inquiry into the growing marketplace lending industry, the department announced. This type of lending — also known as peer-to-peer or P2P — allows consumers and small businesses to get personal loans through online lending platforms without going through a traditional bank or other financial institution. Such lending has been attracting attention of regulators, including a Treasury Department request for information on the industry that was conducted earlier this year.
California regulators will be using the requested information to assess the industry’s size in California and how many consumers and businesses it touches, as well as to better understand various loan and investor funding programs used by marketplace lenders. That knowledge, in turn, will help the DBO assess how the state’s licensing and regulatory authorities are working when it comes to the industry.
As part of the inquiry, the regulator sent an online survey to 14 marketplace lenders requesting five-year trend data about their loan and investor funding programs. The survey also requests information about the firms’ business models and online platforms. The DBO sent the request to firms that offer personal or small business loans. The survey responses are due by March 9.