Business Insider has released a report on US regulation and fintech; says US regulation is a hindrance to the growth of the industry and is slowing its potential; the report titled, "The US Fintech Regulation Report," provides details on regulatory agencies' involvement with fintech and outlines their initiatives; explains the negative effects of regulation on the industry. Source
The Consumer Financial Protection Bureau (CFPB) will appeal the court's unconstitutional ruling in the case of CFPB v. PHH in which PHH argued the CFPB's authoritative powers were too broad following enforcement actions that resulted in penalties primarily for referring consumers to mortgage insurers for compensation; the CFPB is requesting that the case be heard by all judges in the D.C. Circuit Court of Appeals rather than a panel of only three judges which provided the October ruling; if the verdict in the case is unchanged, the president will still be able to replace the CFPB director at his discretion; it's likely that Director Cordray could be replaced by President-Elect Donald Trump given his plans for Dodd-Frank. Source
Passporting could increase fintech competitiveness across Europe as the UK prepares to leave the European Union; passporting would lower regulatory requirements for fintech firms in the European Union allowing them to operate more freely across Europe; it would also create greater incentive for firms to move their business to the European Union and away from London; the European Commission has launched a three month consultation period on passporting and new legislations for fintechs which will be followed with legislative proposals; on Thursday, March 23 the European Commission also published a plan for European Union financial services companies that will focus on reducing costs and increasing consumer protection. Source
The Digital Real is one of the most ambitious undertakings of the BCB, which has been seeking to accelerate financial inclusion in Brazil.
Preserving singleness of money as stablecoins are introduced are just one of the challenges UK regulators will face in ongoing regulation.
Stress testing from Funding Circle has reported its loan platform would still provide investors with a net return of 6.4% given a worst case market scenario; while effects from Brexit continue to be debated, market skeptics are not as optimistic as the UK platforms; they foresee stagflation in the UK characterized by higher unemployment and slowing GDP growth; they are also concerned about a lack of skin in the game which has prompted parliament member, Chris Philp, to request from the Financial Conduct Authority that a portion of each firm's loans include balance sheet capital; while marketplace lending executives are against this approach, policy makers are considering it. Source
The Marketplace Lending Association was launched in April of 2016 and is one of the industry's leading advocacy groups; in September it hired Nat Hoopes to lead the Association and represent the industry in Washington, D.C.; Lend Academy interviews Nat Hoopes in their most recent podcast, providing details on his background in the industry, the evolvement of the MLA and his insight on the current regulatory developments affecting marketplace lending. Source
I never talk politics on the blog here but I must commend the Democrats and Republicans for coming together last...
The Securities and Exchange Commission (SEC) has requested that Lending Club provide increased disclosure on its loan portfolio and sources of funds also suggesting they improve non-GAAP reporting which is potentially misleading for investors; Lending Club has agreed to provide more disclosure and evolved its SEC filings accordingly however it has defended its non-GAAP accounting procedures, reporting it did not see the measures as misleading; recent requests for added disclosure as a publicly traded company are included in the SEC's last correspondence on November 4; the items remain open and the SEC's most recent correspondence is in addition to its review of the company following the replacement of its CEO in May. Source
PricewaterhouseCoopers' DeNovo team says transparency, credibility and evolving business models will be key factors for marketplace lending in 2017; increased disclosures and new solutions for data analytics are expected to help transparency while also improving confidence and credibility; new regulations will also be an important factor for the landscape overall, potentially creating new business requirements while also validating funding sources; the DeNovo team also cites potentially lower investment taxes from House Speaker Paul Ryan's "A Better Way" plan and expansion to broader lending categories as important for the new year; in 2017 funding disbursement is also expected to come from a wider range of sources with securitization in the lead; originations overall in 2016 are down 4.9% through September at $7.8 billion versus $8.2 billion in 2015 while securitizations have increased by 80% at $5.4 billion versus $3.0 billion in 2015 according to Orchard. Source