small business loans

U.S. Treasury Department Issues White Paper on Online Marketplace Lending Industry

On May 10, 2016, the Department of the Treasury issued a white paper on online marketplace lending that maps the current market landscape, reviews industry insights and offers policy proposals for the road ahead.  Based on approximately 100 responses from online marketplace lenders, financial institutions, investors and other key industry figures, the Treasury, in consultation with the CFPB, FDIC, Federal Reserve Board, FTC, OCC, SBA and SEC, made several notable recommendations and observations.

The white paper explores policies that would expand regulatory oversight, including standardized representations and warranties in securitizations, pricing methodology standards, the implementation of a registry for tracking data on transactions and the reporting of loan-level performance, among others.  In addition, the Treasury mentions potential cybersecurity threats, anti-money laundering, the uneven protections and regulations in place for small business borrowers and the growth of the mortgage and auto loan markets as some of the emerging trends to monitor.  The Treasury is also considering the role of federal agencies in regulating these areas, including the formation of an interagency working group for online market place lending.  Press ReleaseWhite Paper.

Rating Agency Developments

On June 3, DBRS released its methodology for rating U.S. RMBS servicing advance transactions. DBRS Report.

On June 2, S&P published its approach to analyzing the cash flow of Australian and New Zealand RMBS. S&P Release.

On May 27, S&P released a request for comments on proposed changes to its methodology and assumptions for assessing counterparty and supporting party risk. On May 28, S&P also released a request for comments on proposed changes to counterparty and supporting party risk for structured transactions in Japan. Comments to both of the proposed criteria are requested by June 30. S&P Release. S&P Release (Japan).

On June 2, S&P released an advance notice of proposed changes to the methodologies and assumptions used to rate U.S. securitizations backed by small business loansS&P Release.

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