WASHINGTON–Many within the credit union community have been predicting that it’s just a matter of time before many of the leading online lenders are finally brought under the supervision of regulators.
Now that time appears to be 2017. The CFPB said it plans to bring the largest online lenders under its supervision by late next year, and that those lenders will need to heed the same rules being applied to banks and credit unions.
The Wall Street Journal reported that the CFPB plans to introduce a proposal in the fall of this year aimed at the largest of the so-called installment lenders that offer small dollar loans, including car title loans. The Journal further reported that the CFPB is considering broadening its definition of “installment” lending to include marketplace lenders, which offer similar small-dollar loans.
The installment lenders that would be covered by the CFPB’s new rules are different from payday lenders. The CFPB said it has been fielding complaints about installment lenders from consumers.
The kinds of online lenders that are likely to fall under the CFPB’s new rules would include companies such as LendingClub and Prosper Marketplace.