Marketplace lending

Western Independent Bankers, a consortium of about 130 community banks in 13 western states, has entered into a deal to use the marketplace lender LendKey to underwrite and service auto loans.

Marketplace lender Social Finance has expanded its education loans to parents of students in 49 states and the District of Columbia.

Consumers should receive the same level of protection whether they choose to do business with a bank or with marketplace lenders and other challengers.

The high-flying sector is primed for a correction, industry leaders said this week. Declining credit standards are one of the top concerns.

Former Treasury Secretary Larry Summers, who sits on Lending Club's board, said in a speech Wednesday that such technology-focused marketplace lenders should be given a fair chance to compete.

OnDeck Capital, the online lender whose initial public offering raised eyebrows in December, posted a net loss of $4.3 million for the fourth quarter in its first report as a public company.

Because of a regulatory quirk, Lending Club and its competitors depend on banks to issue their loans. The set-up raises questions about the regulatory outlook for the fast-growing marketplace lending sector.

Once known as peer-to-peer, online marketplace lending grew phenomenally and evolved rapidly in 2014, as capital flooded in from institutional investors and traditional bankers sat up and took notice.