Online financing platforms aimed at small businesses are drawing new scrutiny from states concerned the largely unregulated industry could cause a new predatory lending crisis.
California is soliciting data from the largest lenders as state officials eye a non-bank lending statute as a possible enforcement and regulatory tool. Illinois is considering legislation that would put most of the small business lending players under the thumb of the state’s Department of Financial and Professional Regulation (DFPR).
State scrutiny of commercial lending platforms aimed at small businesses such as restaurants, auto repair shops and tech start-ups comes as federal regulators have also begun assessing the need for greater regulation of online lenders.
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