regulation

Prosper enters quite period for registration statement filing

wiseclerk 1 Comment

LogoProsper.com announced that it is entering a quite period:

Prosper has started a process to register, with the appropriate securities authorities, promissory notes that may be offered and sold to lenders through our site in the future.

The registration filing is a necessary step toward making the secondary lending market available to the community. This is something many of you have been asking for, and we believe the liquidity of a secondary market will make Prosper even more vibrant.

Until we complete the registration process, we will not accept new lender registrations or allow new commitments from existing lenders. If you’re an existing lender, your current lender agreements will be unaffected; your existing loans will continue to be serviced; you’ll be able to track and monitor your loans; and you’ll be able to withdraw funds from your Prosper account.

See Prosper blog announcement. Prosper seems to be copying the route Lendingclub.com already successfully completed.

Further coverage at Prosper Lending Review and Personal Loan Portfolio.

Australian Lending Hub aims at real-time verification

wiseclerk

Lending Hub – an australian p2p lending site, which says it will launch in August or September 2008, has set an ambiguous aim: processing borrowing and lending applications in real time.

The Lending Hub system will check and process a borrowing application within less than a minute (assuming you have a traceable credit history and have provided all required information). Now instead of waiting at a bank or searching for your nearest branch we’ll be able to process your details in less time than it takes to grab a coffee!

If we require any physical documents (e.g. payslips or bank account statements) you can upload a scan directly to your Lending Hub account. No need to mail us anything (unless you really want to of course).

As do most p2p lending services, Lending Hub will not charge a fee for early repayment of loans, which it says is an advantage over most other lending services in Australia.

Lendinghub will be regulated under the Uniform Consumer Credit Code legislation.

You can also read a guest article by Ivan Martelli, Director of Lending Hub

Big news – Prosper goes national with 36 percent max interest rate

wiseclerk 2 Comments

Announced today Prosper.com has achieved nationwide lending (exceptions South Dakota and Texas) with an interest rate maximum of 36 percent. Previously maximum interest rates varied on a state by state basis depending by the licenses Prosper had acquired.

Prosper chose the same construct to go national as did Lendingclub in December – both partnered with WebBank, Utah.

All loans originated through the Prosper marketplace are made by WebBank, a Utah-chartered Industrial Bank. Prosper provides services to WebBank in connection with the origination of such loans and Prosper services loans made to Prosper borrowers on behalf of registered Prosper lenders who purchase such loans.

This step has good potential to multiply the monthly loan volume originated by Prosper, as chances for obtaining a loan were in the past harmed in some states by low state interest rate caps (especially for lower credit grades).

Lendingclub quiet period – lenders can not sign up or bid on new loans

wiseclerk

Surprisingly Lendingclub.com stopped signup for new lenders and existing lenders can not make bids on new loans (old loans are continued to be serviced). Borrowers can still obtain new loans – they are funded directly by Lendingclub. The announcement email sent out to members is quoted in this blog post.

The Lendingclub website states this message:

Lending Club has started a process to register, with the appropriate securities authorities, promissory notes that may be offered and sold to lenders through our site in the future. Until we complete the registration process, we will not accept new lender registrations or allow new commitments from existing lenders. We will continue to service all previously funded loans during this period, and lenders will be able to access their accounts, monitor their portfolios, and withdraw available funds without changes.

The borrowing side of our site will remain generally unaffected by this registration process; borrowers can continue to apply for loans and new loans posted after April 7, 2008, will be funded and held only by Lending Club.

Until the registration process is completed, the company will undergo a quiet period and will not be able to respond to press and other inquiries about Lending Club or the registration process during that time.

On Techcrunch there is speculation that "Lending Club is looking to obtain a broker dealer license from the SEC that would legitimize its operations".

If this is the case I could not find a recent SEC filing connected to this. The last one I found dates February 13th.

Netbanker has a short statement from Prosper, essentially saying that Prosper believes itself to be in compliance with all state and federal laws.

Background on regulator’s action against IOU Central

wiseclerk 1 Comment

Today the Quebec security regulator in a press release commented on the action taken against IOU Central:

At the request of the Autorité des marchés financiers (AMF), the Bureau de décision et de révision en valeurs mobilières (BDRVM) issued an order on February 27, 2008 against IOU Central Inc. ("IOU") to cease any activity, directly, indirectly or by Internet, in respect of a transaction in a form of investment governed by the Securities Act (the "Act"), including any activity as a securities dealer. The BDRVM also ordered Philippe Marleau and all directors, officers, employees, representatives and mandataries of IOU to cease any activity in respect of a transaction in securities in a form of investment governed by the Act for and on behalf of IOU, including any activity as a securities dealer.

…

For the protection of investors, the AMF stressed that it was imperative that the BDRVM issue this decision without a prior hearing since IOU continued to operate its website.
The Autorité des marchés financiers (AMF) is the regulatory and oversight body for Québec’s financial sector.

More background on Microlending.ca. The link to the Toronto Star article there did not work. I believe this is the correct link.

Breaking news: IOU Central suspended by regulator

wiseclerk

After being offline for several hours, Canadian IOUCentral.ca is now online again, but with limited functionality. That means that currently no loan listing and bidding is possible.

From the website:

Why Is IOU Central Operating With Limited Functionalities?
IOU Central is now operating with limited functionality while we resolve a regulatory matter. IOU Central is acting in a very new area. We are the first in Canada, although similar models are operating under similar regulatory environments in the US and the UK. We are modeled on those innovative enterprises. We are committed to working with all the relevant regulatory bodies in order for us to continue to offer this service to borrowers and lenders. We will take all measures necessary to ensure we are working in full compliance with all regulations.

When Will IOU Central Be Fully Operational?
We will notify all our users by email when the site is fully operational. If you are not already a user, you may register with us and we will notify you by email when the site is fully operational.