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[Fred93]

As someone mentioned over at The Hill, I am not yet convinced it is regulation that is stifling Prosper's growth.  LendingClub seems to be growing just fine, subject to the same regulatory oversight.

Yes.   I believe Larsen's energies are misdirected.  He should be working to grow the business.

[TotoMMB]

As someone mentioned over at The Hill, I am not yet convinced it is regulation that is stifling Prosper's growth.  LendingClub seems to be growing just fine, subject to the same regulatory oversight.

Yes.   I believe Larsen's energies are misdirected.  He should be working to grow the business.

Isn't "over-regulation" the convenient excuse when a new competitor is eating your lunch? Forget growth, Larsen needs to repair first, then growth shouldn't be such a challenge.

[nonattender]

As someone mentioned over at The Hill, I am not yet convinced it is regulation that is stifling Prosper's growth.  LendingClub seems to be growing just fine, subject to the same regulatory oversight.

Yes.   I believe Larsen's energies are misdirected.  He should be working to grow the business.

I'd like to see them be able to devote more time to the platform, too.  Unfortunately, it looks like a lot of
their time and attention is being sucked away by a lawsuit (that's the direct result of SEC interventions),
another lawsuit, with their insurance carrier, that's the indirect result of the SEC intervention, etc, etc...

I second your wish that they could focus their energies on growing the business, but, I do have to point
out to you that the guy who just changed the topic from finding a proper regulator and reducing ongoing
uncertainty to "Why isn't Prosper growing?" is, himself, an answer to the very question which he's posing.

It's like wondering why you get no reception, after you organized the neighborhood against cell towers...

"Can you hear me now?"

-t

[Mtnchick]

In 4 years, they still haven't found someone who could run the business of the company? It's 100% Larsen? And he's doing all the legal work too?

[Mark12547]

The rest of this thread has been moved to Lenders - General as "Re: 'Peer Lender' Asks to Be Regulated as a Bank to Escape SEC - additional discussions".

http://www.prospers.org/forum/index.php?topic=20421.0

[ira01]

Perhaps Prosper needs to be regulated by both the Banking Regulators and the SEC.

Yup...  That really is the whole point.

No existing regulatory entity can sufficiently regulate both sides of a peer to peer lending company, ergo,
Prosper's lobbying to regulated by an entity which can deal with the "hybrid" nature of P2P loan platforms.

Net, they're asking for more regulation, in the sense that they want the borrowing side regulated, as well,
and, with a regulatory entity that has power over both sides, we might even see some meaningful rules...

Prosper isn't asking for more regulations, they want to escape the SEC's regulation of the lender side.  That way, they can go back to more blatantly defrauding lenders with the many misrepresentations, half-truths, material omissions, etc., that has been Prosper's modus operandi for years.

[ira01]

The rest of this thread has been moved to Lenders - General as "Re: 'Peer Lender' Asks to Be Regulated as a Bank to Escape SEC - additional discussions".

http://www.prospers.org/forum/index.php?topic=20421.0

Unfortunately, a fair amount of the substantive discussion was erroneously moved as well.  Let's see how much of that I can fix.

[ira01]

As someone mentioned over at The Hill, I am not yet convinced it is regulation that is stifling Prosper's growth.  LendingClub seems to be growing just fine, subject to the same regulatory oversight.

Yes.   I believe Larsen's energies are misdirected.  He should be working to grow the business.

I'd like to see them be able to devote more time to the platform, too.  Unfortunately, it looks like a lot of
their time and attention is being sucked away by a lawsuit (that's the direct result of SEC interventions),
another lawsuit, with their insurance carrier, that's the indirect result of the SEC intervention, etc, etc...

I second your wish that they could focus their energies on growing the business, but, I do have to point
out to you that the guy who just changed the topic from finding a proper regulator and reducing ongoing
uncertainty to "Why isn't Prosper growing?" is, himself, an answer to the very question which he's posing.

It's like wondering why you get no reception, after you organized the neighborhood against cell towers...

"Can you hear me now?"

I have been involved in many significant lawsuits defending companies big and small, and in none of them was a substantial amount of the CEO's time devoted to the litigation.  Blaming the lawsuits for Larsen's failure to grow Prosper is laughable.  The answer to "why isn't Prosper growing" is as plain as the nose on your face (if it wasn't stuck so far up Prosper's ass) -- because Prosper SUCKS.  It is the worst run company I have ever had the misfortune of doing business with.  It has utter disdain for its true customers (the lenders), and demonstrates a complete lack of competence in virtually everything it does.  In the past, at least Prosper was good on the technical side, but now that isn't even true anymore what with the incredibly fucked up "update" that has broken almost everything that used to work.  Presumably, that is because its competent employees have deserted Prosper like the sinking ship it is.

[ira01]

Ira, well said.

NA, if it wasn't this lawsuit, there would have been a different one.

I emailed both of my senators urging them NOT to let Prosper choose its own regulator.  The company has been so negligent with my money It might as well issue an invitation to thieves.  While it's awfully nice that Prosper has been forced -- by the SEC, I might add -- to make meaningful disclosures, the minute the SEC is out of the picture, Prosper will resort to its misleading conduct.  Prosper wants the SEC out for a reason, and that reason does not involve helping lenders.

Fred and Ira, does Prosper's ability to pay a lobbyist change your views of Prosper's potential longevity?

[havastat]

I think it's worth coming up (and letting Congress know of) an investor position.

I would suggest the following:

1. We need securities-style disclosures and investor protections. Banks have their investments protected by the FDIC and are responsible for determining which loans are safe. Peer-to-peer lenders like Prosper, on the other hand, act as marketplaces in which investors make the decisions about who to lend to based on what is disclosed to them. Bank depositors don't need disclosures about individual loans. Peer-to-peer loan investors do. they succeed or fail on them. It's that simple.

2. We need a mechanism to protect investors in the event the peer-to-peer company goes bankrupt or fails to meet its obligations, either through having the investors directly own the notes, or having them owned by some sort of trust with investors as the beneficiary. A big downside of securities treatment has been that the securities laws have been interpreted to require the peer-to-peer company to own the notes. This has resulted in two sources of risk: risk that the borrower will default, and risk that the peer-to-peer company will default. A special exception to the general securities law should be made permitting a mechanism that protects investors from the consequences of peer-to-peer company default, reducing the second source of risk.

[bluestar148]

Hedged and paying.

[Flying Missle]

Perhaps Prosper needs to be regulated by both the Banking Regulators and the SEC.

Yup...  That really is the whole point.

No existing regulatory entity can sufficiently regulate both sides of a peer to peer lending company, ergo,
Prosper's lobbying to regulated by an entity which can deal with the "hybrid" nature of P2P loan platforms.

Net, they're asking for more regulation, in the sense that they want the borrowing side regulated, as well,
and, with a regulatory entity that has power over both sides, we might even see some meaningful rules...

Prosper isn't asking for more regulations, they want to escape the SEC's regulation of the lender side.  That way, they can go back to more blatantly defrauding lenders with the many misrepresentations, half-truths, material omissions, etc., that has been Prosper's modus operandi for years.

I think they actually are asking for more regulation, or at the very least just a different set or regulations to comply with. I'm not familiar with the SEC, but the FDIC, OCC, OTS and every other financial regulatory agency has books and books of regulations to comply with.

The new Consumer Protection Bureau that is being established with the passage of the financial reform bill (assuming is stays in and the bill passes) will only add additional regulations.

[bjjb99]

The SEC "is putting a round peg into a square hole."

Doesn't he have that backwards?  Wouldn't a round peg just go right into a square hole with sides matching the diameter of the peg?

Just sayin'.

[zapp05]

The SEC "is putting a round peg into a square hole."

Doesn't he have that backwards?  Wouldn't a round peg just go right into a square hole with sides matching the diameter of the peg?

Just sayin'.

2 points!

[112233]

The SEC "is putting a round peg into a square hole."

Doesn't he have that backwards?  Wouldn't a round peg just go right into a square hole with sides matching the diameter of the peg?

Just sayin'.

a square peg would work if the diagonal of a square is the same length as the diameter of the round hole.