P2P Lending News

P2P Lender Prosper announced today that they are now welcoming lenders from Florida. Florida is the fourth most populous state in the U.S., which adds 6% of the population to Prosper’s addressable market. Along with recent announcements opening Rhode Island and Virginia, Prosper is now available to 54.1% of the U.S. population. Rival social lending site Lending Club also announced recently that they were open to Missouri lenders, adding 1.9% of the population, for a grand total of 54.3% of the population.

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Correction: The initial post stating that the Bank of Italy reneged on their agreement with Zopa was inaccurate. Thanks to the Zopa Italy team for clarifying things. A corrected post is shown below.

In an update on their blog today, Italian P2P lender Zopa Italia has announced that the site will not relaunch until October or later. Zopa has been working on the establishment of sub-accounts for lenders as part of an agreement with the Bank of Italy, and is pushing the relaunch date out now that they have more details on the technical integration issues involved.

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Last week, peer to peer lending platform Loanio filed an amendment to their original S-1 filing with the SEC. The original filing was made in late June, and the amendment is dated August 14, 2009. The filing is fairly ho-hum until Loanio discloses that they’ve made an arrangement to license their proprietary source code to another corporation.

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Today Prosper announced that they are welcoming lenders from Louisiana and Missouri. This comes a little more than a week after the social lender’s announcement that they are available to investors from Connecticut, Idaho, New Hampshire, and Oregon. The progress in opening up states to new lenders has come at a reasonably good clip, adding 9 new states since Prosper’s relaunch a month ago in mid-July, for a total of 23 states.

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A month after their lending license was suspended by Italian regulators, today Zopa Italia published an email to its users explaining what has been going on, and what their plans are for relaunch. Zopa sources told P2P Lending News back in July that the Bank of Italy was concerend with Zopa Italy’s “transit lender account”, where lender funds are parked before they are disbursed as loans. According to regulators, this aggregated account qualifies Zopa as a banking institution because Zopa is holding money on behalf of lenders for a non-trivial period of time (more than a day, in some cases).

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On Friday the SEC approved P2P lending company Prosper’s sixth amendment to its offering of $500 million in person-to-person loans. The S-1 is effective as of Friday, July 10 at 3:30 PM, and the final Prospectus is dated July 13, 2009. It has taken Prosper almost exactly nine months to get their S-1 approved, which is surprising given that Lending Club got the first P2P lending prospectus approved in only six.

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Seemingly out of nowhere, Zopa Italy’s license to operate as a financial intermediary was cancelled by Italian regulators at the Bank of Italy. As a result, Zopa Italia has halted all lending activity on the site, and has posted a message on the home page linked to an FAQ. This is the message:

Zopa entra in standby

In data 10 luglio 2009 è stato notificato a Zopa il decreto del Ministero dell’Economia e delle Finanze che, su indicazione di Banca d’Italia, ha cancellato dall’elenco degli intermediari finanziari ex art. 106 la nostra società. Come conseguenza immediata ci vediamo costretti a sospendere la trattazione di nuovi prestiti e l’ingresso di nuovi Prestatori.

La società sta valutando tutte le iniziative, anche di natura giurisdizionale, per tutelare la propria posizione e la community. Vi terremo informati su tutte le attività che metteremo in atto per salvaguardare un’iniziativa innovativa, etica, sociale e vantaggiosa per tutti i partecipanti.

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This is getting kind of ridiculous. Either Prosper can’t get their act together on SEC filings, or the SEC is nit-picking their filing to death as penance for going behind their back. But yesterday, July 9, Prosper filed a sixth amendment to their S-1 filing with the US Securities and Exchange Commission.

The changes are minor enough that approval seems imminent. One of the changes is that Prosper added back 61 repurchased loans to the loan volume and performance data in the S-1. Prosper repurchases loans according to their 100% Identity Theft Guarantee, although the S-1 mentions not only identity theft but also “operational issues” contributing to repurchases. No further detail is given on what those operational issues were.

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With apologies to Michael Jackson on the day following his memorial service, it’s hard not to compare the embattled and quirky king of pop to the erstwhile king of P2P lending, Prosper, who continues working day and night to amend its regulatory filings with the SEC. On June 26, Prosper filed yet another amendment (this one makes it five) to their S-1 in the hopes of reopening the US’s first social lending marketplace with the SEC’s blessing.

This S-1 comes less than a month from Prosper’s fourth S-1 amendment on June 1. Does the proximity of this amendment indicate that we’ll see Prosper re-launch with SEC approval any time soon? No idea. Prosper is approaching boy who cried wolf status with their SEC filings.

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Loanio, the little P2P lending company that could, has filed an S-1 with the U.S. Securities and Exchange Commission to offer $50 million in peer-to-peer loans through their web site at Loanio.com. As Loanio makes clear in the email that announced their filing, the registration statement relating to the securities has been filed but has not yet become effective.

This regulatory filing is similar to the first steps taken by Lending Club, Prosper, and IOU Central. (To date, only Lending Club has been approved.) Unlike Prosper and Lending Club, however, who had originated millions in loans and had the opportunity to test their platforms and raise money before submitting to the will of the SEC, Loanio has had a tough row to hoe. According to the S-1, Loanio was formed in April 2007 and eventually launched on October 1, 2008, only to be shut down eight weeks later on November 25.

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