With increased regulatory scrutiny on Lending Club in New York State, it may be time to consider the impact on marketplace lenders from being caught in the regulatory perimeter. While the USA remains dogged by state by legislation the concept of the regulatory perimeter applies in all jurisdictions. Laws around lending practices apply equally to marketplace lenders as to conventional lenders. The findings from the inquiry will be viewed with interest by marketplace lenders in many jurisdictions.
The New York Department of Financial Services has not yet established which companies it may target, but information it receives in response to a May 17 subpoena sent to Lending Club, one of the largest online lending services, could shed light on broader industry practices that require scrutiny, said the person, who was not authorized to discuss the issue publicly.Lending Club has until June 21 to respond. It has said it will cooperate fully with the investigation.Read the full story at fortune.com