22 December 2014

Wells Fargo bans staff from using P2P lending platforms

21 January 2014  |  5683 views  |  0 Wells Fargo

Wells Fargo employees have been told by the bank that they are not allowed to lend their own money through peer-to-peer platforms, according to the Financial Times.

In a message to staffers who have made loans through the likes of Lending Club and Prosper, a Wells Fargo compliance officer asked them to not make any more and to exit existing investments "as soon as practical".

The decision was made after bank "ethics administrators" decided "that for-profit peer-to-peer lending is a competitive activity that poses a conflict of interest," says the message seen by the FT.

Although still dwarfed by traditional lenders, P2P firms have prospered since the financial crisis, providing individuals and small businesses snubbed by banks with an alternative source of funds.

Lending Club has facilitated more than $3 billion in loans since launching around seven years ago and last year scored a $125 million funding round led by Google.

Prosper is actually led by a former Wells Fargo man - Stephan Vermut, who briefly led the bank's foray into prime brokerage services before leaving for the P2P outfit last year.

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