Leading online marketplace lenders Lending Club, Prosper Marketplace, and Funding Circle launched Marketplace Lending Association (MLA), a nonprofit organization designed to promote sound public policy and business practices for investors and borrowers, the companies announced yesterday.
The association aims to create a more transparent financial system, inform sound policy development, and expand access to affordable credit, according to the release.
“Marketplace lending platforms have a unique opportunity to make credit more affordable for consumers and more available to small business owners, while offering attractive investment opportunities,” Renaud Laplanche, Lending Club founder and chief executive, said in the release. “This opportunity will only emerge if the marketplace lender’s “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 association is open to all marketplace lending platforms that commit to the operating standards and meet the membership criteria. The association will be governed by a board of directors, each nominated by a founding member, according to the release. Additional directors will be appointed as more marketplace lending companies join, and an executive director and staff will be hired upon expansion.
The association has also established a code of business conduct, called the Marketplace Lending Operating Standards, to address risk management, governance, and transparency for investors.
