NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases a new report that focuses on the U.S. online consumer marketplace lending sector.
Online marketplace lending is a small but rapidly growing segment of the U.S. lending market. Marketplace Lenders (MPLs) create an internet-based “marketplace” that offers a variety of loan products outside of the traditional bank lending system. Recently, MPLs have been funding a larger amount of originations outside of the traditional peer-to-peer structure and through more diverse funding sources, including via privately placed pass-through notes, whole loan sales to institutional investors on a competitive and flow basis, and private equity. The infusion of institutional investor capital has been a major reason for the growth of the marketplace lending sector, with new entrants and incumbent lenders now competing heavily for volume.
KBRA recognizes that this sector is still evolving and that currently there are considerable differences in the various MPLs’ origination models, funding/sales of loans on the platforms and servicing practices. Regulatory initiatives, such as the US Treasury Department’s recent request for information related to online marketplace lending, and recent case law, for example the Madden v. Midland Funding case that prevents the exportation of state usury laws in certain jurisdiction, are impacting many aspects of online marketplace lending.
KBRA’s report examines the marketplace lending process, participants and highlights the key credit considerations facing the sector as MPLs and investors/aggregators move to access the capital markets on a more regular basis.
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About Kroll Bond Rating Agency
KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).