Lendingclub.com announced today that now users of all 50 states can borrow money through Lendingclub.
Prosper.com is covering 47 states, but in some states borrowing is restricted to business purpose loans.
regulation
First law amendment in reaction to peer to peer lending?
The Netherlands will possibly be the first country where a law will be changed in reaction to peer to peer lending. Peer to peer lending in all countries is regulated by national laws but so far these did apply to all financial institutions and did not have specific provisions for peer to peer lending.
Dutch treasury secretary Bos says he sees the need to amend existing laws. In the Netherlands there have been parliament debates and regulation hassles triggered by the launch of p2p lending service Boober.nl in February 2007.
Recent peer-to-peer lending developments in the Netherlands
Dutch Boober this week resumed full operations overcoming an imposed stop on lending. Lenders however now are facing even more restrictions. After a maximum amount of 39000 Euro was introduced for lenders earlier, a new rule now allows lenders to close no more than 100 loans. Since the minimum bid is only 5 Euro in the worst case that could mean, that a lender has to stop after lending out 500 Euro (100×5). Apparently this development means that the top lenders, responsible for 30% of Boober's total loan volume, are banned from lending more money. While lenders critizise this new development as overregulated forced by dutch regulator AFM, there is not much they can do about it. Theoretically each individual lender could apply for a license, but in practise license fees over 1000 Euro prohibit this move.
After a failed launch in May p2p lending service Frooble.nl now wants to lauch with a new concept. Borrowers can seek short term loans of 1 to 3 month duration for amounts between 50 and 500 Euro. Apparently these parameters have been selected to avoid falling under the regulation of the AFM. It remains to be seen if Frooble can thrive with this business model.
Regulator forces Dutch p2p lending site boober to stop lending
Dutch p2p lending site Boober.nl is in big trouble. A court in Rotterdam ruled that Boober needs a license, with the judge supporting the position of the regulating authority AFM. After Boober published its interpretation what this ruling means, the AFM clarified its position in a press release.
Under pressure Boober finally posted a statement on its homepage saying that while the site remains open and existing loans will continue to be serviced, Boober stops any lender bidding. Statement:
Beste Boober Gebruiker
In tegenstelling tot wat dinsdag en woensdag is gecommuniceerd heeft Boober gisteravond na overleg met de Autoriteit Financiële Markten besloten om de krediet-bemiddelingsactiviteiten voorlopig te staken. Dit wordt geëffectueerd door uitleners voorlopig niet de mogelijkheid te geven op leningen te bieden . De site blijft gewoon beschikbaar en het besluit heeft geen enkele consequentie voor lopende leningen.
Boober betreurt de ongelukkige wijze waarop zij met de markt heeft gecommuniceerd en verwacht begin volgende week meer duidelijkheid te kunnen verschaffen.
Boober's service was controversial in the Netherlands from the start. It was even subject of discussion of the Dutch national parliament.
An update on what will happen next is expected early next week.
Richard van den Toorn, publisher of the great site Booberwatch.nl has supplied P2P-Banking.com with this chronology of events: Continue reading
Boober quarreling with regulator
Dutch p2p lending service Boober.nl is quarreling with the regulating authority AFM. The AFM argues Boober needs a licence because it allows lenders in peer to peer lending to engage in commercial activities.
Boober CEO Guus Drijver denies that. He says that lenders can lend out only a maximum amount of 39000 Euro and even with an assumed interest rate of 10%, 3900 Euro profit per year could hardly be seen as commercial activity.
(Source: sprout.nl)
Micro-lending regulation in Europe
Found this interesting paper written by Prof. Dr. Udo Reifner on regulation of micro loans in Europe. Written (2000) well before the advent of p2p lending over the internet, it compares regulation for micro loans in 7 European countries (Belgium, France, Germany, Ireland, Italy, Netherlands, UK). It is one of the best sources that is publicly available, that I have seen so far.