Calif. Identifies 14 Firms Targeted in Marketplace Lending Inquiry
The first state inquiry into marketplace lending is seeking information from a broad mix of companies, including consumer lenders, small-business lenders, and firms that are not primarily in the lending business.
The regulatory path may also be bumpier for P-to-P lenders that focus on subprime borrowers, predicts Raj Date, a former second-in-command at the Consumer Financial Protection Bureau.
California regulators on Monday identified 14 companies that the state is targeting as part of its recently announced inquiry into the marketplace lending industry.
Firms on the list have been asked to provide a slew of data to the California Department of Business Oversight, including information about their loan volumes, the annual percentage rates they charge to borrowers, and their investor bases.
The specific companies were not named in a Dec. 11 press release from the Department of Business Oversight, but many of them were quickly identified in news reports.
Tom Dresslar, a spokesman for the Department of Business Oversight, sent out an email Monday naming the 14 firms. "At this point, we decided that full disclosure was the appropriate course," he told American Banker.
The companies on the list include: Lending Club, Prosper Marketplace, Social Finance, CircleBack Lending, Affirm and Avant, all of which specialize in consumer lending; as well as OnDeck Capital, CAN Capital, Kabbage, Funding Circle, Bond Street and Fundbox, which provide financing to small businesses.
Also on the list are PayPal and Square, both of which offer financing to merchants that are customers of their payments arms.
In an interview Friday, Dresslar said that the state agency may at some point decide to look beyond the companies that received the initial data requests. "Folks shouldn't assume that this group of 14 is going to be the entire universe of lending that end up being part of this inquiry," he said.