US FINTECH

This fall, the Commission will host a forum – the second in its FinTech series – on crowdfunding and peer-to-peer payment systems. Crowdfunding is the process by which companies and individuals raise money from the public to fund new products, projects or individual needs. Peer-to-peer payment systems are online services – often in the form of mobile apps – that allow consumers to share money electronically. These systems make it easier for consumers who may not carry cash to send and receive money from other people quickly. The half-day forum will bring together industry participants, consumer groups, researchers, and government representatives. The forum will examine the various models of crowdfunding and peer-to-peer payments used by companies, the potential benefits to consumers, and possible consumer protection concerns. In addition, the forum will look at how existing consumer protection laws might apply to companies participating in these areas.

Marketplace lenders are typically online non-bank financial companies that leverage technology to reach potential borrowers, evaluate creditworthiness, and obtain credit sources for loans. Marketplace lenders tout the ability to provide consumers with a faster, cheaper, and easier way to get credit than some traditional lenders. Participants at the June 9th Forum also discussed the potential for marketplace lenders to reach and provide credit to borrowers with limited credit histories and to historically underserved communities. Marketplace lending has seen huge growth, and, as a presentation by the FTC’s Office of Technology Research and Investigation showed, has expanded to include loans for purposes as wide-ranging as education, mortgages, and medical expenses.