Analysis of the Regulatory Landscape

posted in: Regulatory | 0

One of the most daunting aspects of being a marketplace lender is determining what laws and regulations are applicable to your business. After all, if you don’t come under the authority of a specific regulator (think broker-dealers and FINRA or investment advisers and the SEC), then you might end up being subject to numerous regulatory regimes and at the mercy of multiple regulatory authorities.

We came up with 26 Acts, Laws, and Rules that are governed by 7 different federal agencies (plus the applicable agencies of the 50 states). It doesn’t take a compliance scholar to know that this is not only a crushing amount of rules and regulations to keep track of, but also a significant number of regulators that have the right to poke around your operations.

This list is not meant to be exhaustive and does not touch upon the myriad individual state and local ordinances and regulations that may be implicated by your company’s operations. Nor does it address the regulations of foreign countries, the European Commission or other non-domestic regulatory bodies. Still, it should give you a framework for analyzing which domestic regulatory schemes may apply to the conduct of your business and whether you have policies and procedures in place to address those regulatory requirements.

Key

SEC = Securities and Exchange Commission
CFPB = Consumer Financial Protection Bureau
FTC = Federal Trade Commission
OCC = Office of the Comptroller of the Currency
FinCEN = Financial Crimes Enforcement Network
FCC = Federal Communications Commission
FDIC = Federal Deposit Insurance Corporation

Securities Laws

Securities Act of 1933/Regulation D (SEC)
Blue Sky Laws (Individual States)
JOBS Act/Crowdfunding Rules (SEC)
Investment Advisers Act of 1940 (SEC)
Securities Exchange Act of 1934 (SEC)
Investment Company Act of 1940 (SEC)

Consumer Protection Laws

Truth in Lending Act (CFPB)
Real Estate Settlement Procedures Act (CFPB)
Fair Credit Reporting Act (FTC, CFPB)
Equal Credit Opportunity Act (CFPB)
Fair and Accurate Credit Transactions Act (FTC, OCC)

Anti-Money Laundering

Bank Secrecy Act/USA Patriot Act (OCC)
Know Your Customer (FinCEN)

Privacy

Gramm-Leach-Bliley Act (SEC, FTC)
Identity Theft Red Flag Rules (SEC, FTC)
Laws Governing Conduct after Data Breaches (Individual States)
Information and Data Security Laws (Individual States)

Lending

Usury Laws (Individual States)
State Licensing Requirements (Individual States)

Other

Electronic Commerce Laws (FCC)
Securities Whistleblower Incentives and Protection (SEC)
CAN-SPAM ACT (FTC)                                                                                                                                                                                                                                                 Servicemembers’ Civil Relief Act (CFPB)
The Electronic Signatures Act (FDIC)
Unfair or Deceptive Acts and Practices (FTC)
Telephone Consumer Protection Act (FCC)