Engine, an industry group for startup businesses, sent an open letter to the Securities and Exchange Commission earlier this week requesting action on the crowdfunding provision within 2012's JOBS Act passed by Congress.
A portion of the law intended to loosen access to crowdfunding capital for businesses has yet to be fully implemented due to a slower than anticipated rollout by the SEC. Essentially the law amended the Securities Act to allow crowdfunding transactions of $1 million or less involving the issuance of a security be exempt from registration requirements and obstacles within interstate commerce.
However, after releasing proposed rules for a 90-day comment period in October 2013, the SEC has been slow to implement final rules around the provision, which many businesses involved in online marketplace lending are eager for, along with a rule based on another section of the law to allow qualified companies to offer up to $50 million of securities in a 12-month window.
One area of growth for the online marketplace industry is the increased securitization of its loans.
"While we remain excited about the Act's potential to stimulate growth across America," the letter reads, "we are frustrated by the Commission's failure to uphold its end of the statutory bargain," before claiming that the SEC was in violation of the law by not finalizing rules for crowdfunding and security offerings.
When contacted, the SEC declined to comment specifically on why the final rule has yet to come.
Yesterday, in a speech to the SEC Advisory Committee on Small and Emerging Companies, Chair Mary Jo White said that, "Completion of these rulemakings remains an important priority and the staff is working hard on the recommendations for the final rules."