Tom Sporkin Quoted in Law360 Article, "Treasury Recs Could Limit Disruption By Marketplace Lenders"
May 10, 2016
Tom Sporkin was quoted in Evan Weinberger's Law360 article, "Treasury Recs Could Limit Disruption By Marketplace Lenders," on May 10, 2016.
A Treasury Department study on marketplace lending released Tuesday showed that the still young industry, touted as a disruptive force in finance, will likely have to deal with an increase in federal regulation even as it confronts a slew of other problems that have recently bubbled up.
The Treasury Department white paper, the end result of an information request it sent out last summer, highlights some of the shortcomings in how existing financial rules deal with the peer-to-peer loans offered on electronic platforms like LendingClub Corp., and seeks a unified response from the relevant regulators.
In general, the Treasury Department found that marketplace lenders offered a service that could be beneficial to consumers and small businesses.
Combined with a recent white paper from the Office of the Comptroller of the Currency welcoming fintech innovations and other recent developments, the Treasury white paper was another indication that the federal government is getting on board, said BuckleySandler LLP partner Thomas A. Sporkin.
“The federal government is embracing fintech,” he said.
Treasury’s paper also called for reviewing the necessity of new legislation to address any shortcomings in existing consumer protection and prudential oversight of the lenders.
“These are consumer financial service products. They’re also securities, so the regulators are trying to apply the standard regulatory framework to this emerging, cutting-edge amalgamation of both. And it’s challenging,” Sporkin said.