According to a 2019 PWC survey, 42% of banks engaged in joint partnerships with fintech companies, a figure that more than doubles to 94% of financial services companies expressing confidence that fintechs would help grow their company’s revenue over the coming years.
Online and alternative lending has opened up credit to a wide range of individuals and businesses who may not meet the traditional definitions of creditworthiness laid out by banks and traditional lenders. They have also brought valuable innovation and new efficiencies to an area of finance that had stayed very close to its face-to-face, paper-based history, even as other banking services modernized.
In many ways, small fintech lenders look and behave more like consumers than corporations. But unlike consumers, they are not protected by disclosure requirements under the Truth in Lending Act.
While lenders are required to comply with anti-discrimination laws like the Equal Credit Opportunity Act, these lenders are not subjected to supervisory exams like those required for community banks and credit unions.
