Three reasons why RateSetter should rejoin the P2PFA

THE Peer-to-Peer Finance Association (P2PFA) is rumoured to be open to the prospect of RateSetter returning to the self-regulatory body, but how would that help boost the organisation?

RateSetter left the P2PFA in 2017 after breaching its transparency rules following interventions with its wholesale lending partners.

But two years on, both parties are still talking to each other, and while no official approach has been made, it is understood there would be willingness for RateSetter, one of the founding members of the P2PFA, to return.

So what would be the benefits of a return?

Size
It is often said there is strength in numbers when it comes to lobbying. RateSetter is one of the ‘Big Three’ lenders, recently reaching £3bn of lending.

In recent months, the P2PFA has lost one of its biggest members, MarketInvoice, so the return of RateSetter would bring another billion-pound lender to the fray alongside Zopa and Funding Circle.

Having more recognisable brands among the membership would help the P2PFA gain gravitas among the public and regulators.

Strength
Just because RateSetter has left the P2PFA, it doesn’t mean it hasn’t been lobbying.

The platform has been a key member of the Tax Incentivised Working Group’s (TISA) efforts to create a standardised format to appropriateness tests, with a committee chaired by RateSetter’s chief investments officer Mario Lupori (pictured).

Its experience and size would help give the P2PFA sway with regulators at a time that the sector is set for key reforms such as the introduction of marketing restrictions and appropriateness tests.

Consumer voice
RateSetter’s departure from the P2PFA left a gap in consumer representation at the trade body.

The P2PFA is currently dominated by business lenders such as Funding Circle, CrowdStacker and Folk2Folk, with only Zopa and LendingWorks providing a consumer view.

Bringing RateSetter back in would help redress the balance.