The decision by the U.S. Department of the Treasury to solicit public comment on its online marketplace lending study is a step in the right direction, the Native American Financial Services Association said on Monday.
On July 16, the Treasury Department said in a press release that they are encouraging responses that will help policy makers study “the various business models and products offered by online marketplace lenders, the potential for online marketplace lending to expand access to credit to historically underserved borrowers, and how the financial regulatory framework should evolve to support the safe growth of this industry.”
“Treasury’s announcement is a tremendous affirmation of what NAFSA has been saying all along,” Barry Brandon, executive director of NAFSA, said in a news release. “Innovations in the financial services industry -- like those pioneered by the tribal businesses that make up NAFSA -- are providing underbanked consumers with safe and affordable access to credit when they need it the most.”
The department will review the comments through a formal Request for Information (RFI), which is published in the Federal Register. Submissions are currently being accepted, but close after a 45 day window, ending Aug. 31. Roundtable discussions will also take place this summer between the public and officials from the Treasury Department.
In a news release, NAFSA said they plan to provide the department with insight into how important these online businesses are to Native American economic development. “With many tribes facing extreme poverty and unemployment rates, and tied to geographically remote reservations lacking access to traditional avenues of economic growth, e-commerce has proven itself to be an indispensable tool for improving the social welfare of Native Americans,” Brandon said.
NAFSA said they will also press the Treasury for its research to be comprehensive. “Unlike the CFPB [Consumer Financial Protection Bureau], which has taken a narrow-minded view of the online lending industry and its impact, the Treasury Department has the opportunity with this study to conduct a much more thorough review that examines the issue at both the macro and microeconomic levels,” Brandon said in the release. “A transparent and comprehensive analysis will be essential to ensuring the study’s findings are valid and useful for policymakers.”