Congressman Emanuel Cleaver, II recently announced that he launched an investigation into small business fintech lending. The lawmaker sent letters to the CEOs of several fintech lenders asking for information regarding the types of products offered and rates charged, anti-discrimination practices, and the types of disclosures and terms provided to borrowers.
In the letter, the Congressman states that “the payday loan industry has often targeted communities of color with high rates and fees, and Congress needs further information that small business payday lending is operating with transparency and free of discrimination.”
Related to disclosures provided to small business borrowers, the letter notes that “consumers are able to obtain a clear disclosure of rates and fees under the Truth in Lending Act. However, small business borrowers typically don’t have these protections.”