Twenty-first Century Financial Regulation: P2P Lending, Fintech, and the Argument for a Special Purpose Fintech Charter Approach

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Online peer-to-peer (P2P) lending, once a marketplace teeming with retail investors, is now dominated by sophisticated institutional investors and banks. This seismic shift in investor base has been coupled with significant growth for the legacy P2P lenders and new entrants. A new regulatory approach is needed to grapple with these changes—one that focuses on consumer protection, as opposed to one that seeks to protect the sophisticated investors purchasing these loans. Fortunately, such an approach is readily available in the Office of the Comptroller of the Currency’s fintech charter. This Comment surveys the significant changes that have occurred in the P2P lending sector over the past ten years, as well as the risks and benefits to consumers attendant to the rapid growth in this relatively new form of lending. After surveying the current and proposed regulatory approaches toward P2P lending, this Comment explains why a national fintech charter is the best approach to ensuring that consumers who rely on these loans receive the full protections guaranteed by federal law.

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