Consumers and businesses in the United States are increasingly turning to online-only nonbank institutions to borrow money. Research indicates that these companies more than tripled their lending volume from 2014 to 2015, from $11.7 billion to $36.5 billion. Some of these “fintech” lending firms use a peer-to-peer model, while others hold loans in their portfolios. What do borrowers like and dislike about them? And what market issues and regulatory issues may be lurking? The cover article in the latest issue of Econ Focus magazine examines these and other questions about fintech lenders.
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Econ Focus is the economics magazine of the Federal Reserve Bank of Richmond. It covers economic issues affecting the Fifth Federal Reserve District and the nation.
The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.