Among the new organization’s initiatives is the Marketplace Lending Operating Standards, a document addressing investor transparency, responsible lending, governance and controls, and risk management.
The MLA will also lobby policymakers and other stakeholders to develop policies in support of healthy industry development.
Funding Circle Co-Founder and US Managing Director Sam Hodges explained the MLA’s importance.
“The launch of this association reflects our industry’s commitment to the highest standards of transparency and customer protection, while also delivering innovative new ways to provide better value and experiences for consumers, small businesses and investors. In the fast-growing marketplace lending sector, we want to continue to act as a thought leader and thought partner to the appropriate bodies in Washington to ensure continued innovation and responsible growth in the sector.”
Lending Club Founder and CEO Renaud Laplanche explained what the industry needs to do if it is to reach its full potential.
“This opportunity will only materialize if our technology and business model advantage is coupled with sound business practices that enable responsible lending products, consumer friendly and transparent terms, and relentless focus on compliance, security and risk management.”
The MLA is governed by a board of directors consisting of one appointee nominated by each of the founding organizations. More executive members will be appointed as the organization grows. An executive director will also be hired.