The dramatic growth in online lending has far-reaching implications for the retail lending industry, offering numerous advantages for consumers and lenders alike: Lenders benefit from reduced costs, while consumers with online capability have access to more information and choice and lower transaction and loan prices.

From the regulatory perspective, however, the Web revolution raises compliance issues that may fundamentally alter fair-lending enforcement. Regulators and activist groups can be expected to voice increasing concern about how online lending will affect borrowers who lack access to the Internet, and who therefore will not be able to obtain the lower prices and broader choices it offers. The growth in online lending will also stimulate the use of risk-based pricing, which may further accentuate regulatory concerns as higher-risk borrowers are forced to pay higher loan prices.

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