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NYDFS cracks down on unregulated P2P lenders
Chris Hamblin
6 June 2016
In the UK, P2P lenders such as HNW Lending are registered with the Financial Conduct Authority, but many such firms in New York have reportedly escaped the gaze of the regulators because they do not use deposits to make loans and therefore represent a departure from traditional regulated practice. Online lenders act as 'dating agencies' between HNW investors and borrowers. They also sell investors loans that have been securitised. The NYDFS has, according to one report that quotes a source, asked the companies in writing to apply for licences for debt collection, money transmission and mortgage lending forthwith or, if they demur, to send it their prospecti and various management accounts. One of the firms is reported to be Prosper, the second largest of its kind in the United States. Upstart and Avant have told the press that they have not received the letters yet.