Frank O'Rourke (Kildare North, Fianna Fail)
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259. To ask the Minister for Finance the regulations with regard to peer to peer lending; if there is recourse for lenders in the event of borrower default; if there is protections for borrowers in the event of default; if there is regulation of the platforms; if there is regulation of the provision of a peer to peer loan; and if he will make a statement on the matter. [27321/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, peer-to-peer lending is a form of crowdfunding. Crowdfunding involves obtaining small amounts of funding from a large number of different sources, generally individuals but they can also be institutions. Peer-to-peer lending involves lenders providing money directly to borrowers as a loan that is to be repaid with interest through an online crowdfunding platform.

Crowdfunding is an innovative, technology-based form of finance that can be a valuable source of funding for SMEs, either as a complement, or as an alternative, to traditional bank finance. Crowdfunding can provide consumers and smaller investors with a higher rate of return, at a higher risk, than is generally available from deposits or traditional investments.

Crowdfunding, including peer-to-peer lending, is not currently a regulated activity in Ireland. Therefore, there is no regulation of crowdfunding platforms or the provision of peer-to-peer loans. Given this, there are no formal consumer protections available for borrowers using a peer-to-peer lending platform, including in the event of default. The Central Bank of Ireland has issued an information notice alerting consumers to this fact and the associated risks, available at:

The European Commission has indicated that harmonised European regulation of crowdfunding is not anticipated at present.

The IFS 2020 2017 Action Plan commits the Government to conducting a public consultation on the potential regulation of crowdfunding, having regard to international best practice and in the context of the EU Commission Action Plan on Building a Capital Markets Union. My Department recently launched a public consultation on the regulation of crowdfunding that closed on 2^ndJune 2017.

My Department will now consider the submissions received from the public consultation and these will help inform my Department's policy position on whether or not a regulatory regime for crowdfunding would be appropriate and if a bespoke regime should be implemented in Ireland.