Newsroom
May 10, 2016
Hunt: Uneven playing field between CUs, online lenders
NAFCU's Carrie Hunt noted the uneven playing field between credit unions and online lenders in response to the Treasury Department's white paper on online marketplace lenders released Tuesday, in which Treasury recommended more "effective oversight" over the online industry.
"NAFCU and our members welcome Treasury's study of this growing market sector in an effort to protect consumers while promoting a competitive marketplace for all financial institutions, including credit unions," said Hunt, NAFCU's executive vice president of government affairs and general counsel. "Treasury's report largely confirms our concern that there exists an uneven playing field for overregulated credit unions as compared to online marketplace lenders, which are not subject to the same disclosure rules and underwriting standards that apply to traditional lenders."
She continued, "Going forward, we strongly urge Treasury and other financial regulators to promulgate rules that require online market lenders to meet regulatory requirements such as the protections of the Truth in Lending Act and underwriting standards for loans."
Treasury's white paper states the benefits and risks involved with online marketplace lending and highlights certain best practices for market participants.
Among its recommendations, Treasury notes that online lenders could "tap into the local knowledge and understanding of credit markets of CDFIs [community development financial institutions] to reach more borrowers in distressed communities."
NAFCU is referenced in footnote as calling "on the government to take a stronger role supervising online marketplace lenders, similar to the laws in place governing financial institutions."
"NAFCU and our members welcome Treasury's study of this growing market sector in an effort to protect consumers while promoting a competitive marketplace for all financial institutions, including credit unions," said Hunt, NAFCU's executive vice president of government affairs and general counsel. "Treasury's report largely confirms our concern that there exists an uneven playing field for overregulated credit unions as compared to online marketplace lenders, which are not subject to the same disclosure rules and underwriting standards that apply to traditional lenders."
She continued, "Going forward, we strongly urge Treasury and other financial regulators to promulgate rules that require online market lenders to meet regulatory requirements such as the protections of the Truth in Lending Act and underwriting standards for loans."
Treasury's white paper states the benefits and risks involved with online marketplace lending and highlights certain best practices for market participants.
Among its recommendations, Treasury notes that online lenders could "tap into the local knowledge and understanding of credit markets of CDFIs [community development financial institutions] to reach more borrowers in distressed communities."
NAFCU is referenced in footnote as calling "on the government to take a stronger role supervising online marketplace lenders, similar to the laws in place governing financial institutions."
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