On March 7, 2016, the Consumer Financial Protection Bureau (“CFPB”) made its first official moves on “marketplace lending,” which also may be known as “peer-to-peer” lending. The CFPB described marketplace lending as the use of an online “platform” to connect consumers or businesses who seek to borrow money with investors willing to buy or invest in such loans. Ordinarily, the online lending platform operator handles consumer-facing functions such as application taking, underwriting, and customer service. Though not clear in the CFPB’s announcements, it is generally understood that these loans are unsecured extensions of credit funded directly to the consumer’s account. While the CFPB mentions businesses as potential customers for marketplace loans, the agency appears to be directing these issuances to consumers.

The CFPB simultaneously issued two announcements: (1) a press release describing the expansion of its consumer complaint portal to include marketplace lending products; and (2) a consumer bulletin, titled “Understanding online marketplace lending,” which lists and explains factors consumers should take into account when considering online marketplace loans.