The P2PFA has announced revisions to the UK peer to peer lending industry standards it sets for its member platforms. The P2PFA represents the most prestigious online lenders in the country and has been at the forefront of developing a stringent set of principles that guarantee transparency and fairness across all stakeholders.
Christine Farnish, Independent Chair of the P2PFA, commented on the release of new Operating Principles;
“As the largest and most significant part of the UK Fintech scene, peer-to-peer lending continues to grow apace. Our revised good practice standards, which will be followed by all P2PFA member platforms, are built around the principles of transparency, integrity, honesty and competence. Consumers can be confident that they will be able to make informed choices about lending or borrowing on P2PFA member platforms and that they will be treated fairly.”
The new Operating Principles will come into full force next April. The new Principles are as follows:
- Enhancements to the full and comparable disclosure of bad debt and likely returns for investors;
- A ban on platforms borrowing or raising funds through their own platforms;
- Robust credit risk management policy and practice;
- A requirement that retail lenders are not discriminated against in favour of wholesale lenders;
- Transparency for investors so that they can see where their money is being lent;
- Improved disclosures on liquidity risk and risk to capital;
- A requirement to match the term of a direct lending contract with the term of the loan that is agreed;
- Platform governance requirements; and
- A commitment to undertake and publish assessments of platform resilience in stress scenarios
“The P2PFA will continue to lead good practice in this fast-developing market in order to ensure that consumers get a good deal,” added Farnish. “We believe that the changes to our Operating Principles – the P2PFA’s good practice standards – announced today provide important consumer safeguards and will help to promote further trust and enhance confidence in peer-to-peer lending. Whilst our standards supplement and complement the statutory regulations already put in place by the Financial Conduct Authority, we believe it would be helpful for the wider sector were some or all of these standards to be incorporated into the formal regulatory regime in due course.”
The P2PFA was established in 2011 and has remained a single voice for the P2P industry. All members are required to meet published standards which are reviewed on an annual basis. Member platforms include: Folk2Folk, Funding Circle, Landbay, Lending Works, Market Invoice, Thin Cats and Zopa.