The office of American Web Loans in Red Rock, Oklahoma, owned by the Otoe-Missouria Tribe. Photo by Jane Daugherty
The Treasury Department is seeking public comments about the "growing" online lending industry. The department issued a request for information to learn more about an industry in which tribes have emerged as key players. The document indicates the Obama administration is interested in developing regulations to ensure the "safe growth" of the market. “Innovation in financial services is creating new ways for consumers and small businesses to secure credit,” Antonio Weiss, counselor to the Treasury Secretary, said in a press release. “By soliciting public comments on this relatively new industry, we hope to better understand the potential for online technology to expand access to safe and affordable credit for consumers and small businesses." Tribes have attracted attention by establishing online lending operations on their lands. Supporters believe the industry generates jobs and revenues in remote areas where other economic development options are limited. State and federal authorities, however, have been cracking down on tribes by issuing fines, filing lawsuits and taking actions that restrict their access to the banking and financial markets. But supporters have argued that they provide an important service to consumers who aren't served by traditional lenders, an issue that could gain more importance with the Treasury's request for information. "Historically, many American households, small businesses, and promising new enterprises have faced barriers in accessing affordable credit from traditional lenders. To date, the large majority of online marketplace consumer loans have been originated to prime or near- prime consumers to refinance existing debt," the request states. "Online marketplace lending has filled a need for these borrowers by often delivering lower costs and faster decision times than traditional lenders." The request will be published in the Federal Register on Monday. Comments will be accepted for 45 days. Get the Story:
Treasury to Examine Online Lending Industry (The New York Times 7/17) Forthcoming Federal Register Notice:
Public Input on Expanding Access to Credit through Online Marketplace Lending (To Be Published July 20, 2015)
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