Apr
8
In February, I blogged about how Canadian P2P lender IOU Central had suspended activity while they sorted out regulatory concerns. (They’re still not back up.)
Now, it looks like it may be Lending Club’s turn in the US. According to a notice posted on their site, they have stopped allowing their lenders to initiate loans via the site. (More coverage at Netbanker, Techcrunch, and Center Networks.)
Like IOU Central, they’ll continue to service existing loans. However, in an effort to maintain credibility with the borrower side of the equation, they will also continue to accept loan applications, which they will fund themselves from this point on. How long they’ll be able to do that for without having to start placing caps on new loans, I don’t know. They’ve announced $12.3 in total financing.
My guess is their legal team is burning the midnight oil. Anyone thinking of starting their own P2P lending marketplace may want to review this telling video from 2006 where Chris Larsen of Prosper talks about the effort they spent working with regulators before launching, which he says gives them a two year lead over potential entrants to the space. In Canada, CommunityLend seems to be taking a similarly cautious approach to regulatory issues.
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About George Favvas
George Favvas is a serial web entrepreneur based on Montreal, Canada. He's been involved in the web since 1994 and is currently the President of SmartHippo, a community-driven comparison shopping site for financial products and is the co-founder of Reflexity, Inc., a provider of customer acquisition solutions for financial companies.
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- Mathew Ingram
George, I can safely confirm our careful approach at CommunityLend to ensure compliance with all appropriate regulations in Canada.
[…] g-spot posted: My guess is their legal team is burning the midnight oil. Anyone thinking of starting their own […]
If there is anyone out here that can lend TEN Thousand unsecured please write me.
Tam