Once again the markets have fallen in love with a group of young, aggressive and not very regulated lenders.

Online "peer to peer" marketplace lenders like Lending Club, Prosper and Funding Circle are originating loans at a torrid pace and sporting eye-popping public and private market valuations. The growth predictions for this new class of technology-enabled lender are impressive — Morgan Stanley estimates that U.S. MPL originations will increase to more than 8% of total consumer unsecured lending and 16% of small business lending by 2020, with much of the loan volume taken from traditional retail banks.

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