Prosper resumes lending, again
14 July 2009 | 5720 views | 0
US person-to-person loan exchange Prosper says regulators have finally given it the green light to resume lending following nine months out of action.
Prosper - like rival outfits Lending Club and Loanio - was forced to close its doors to new loans last year in order to register its business with the Securities and Exchange Commission.
In April, the firm briefly opened to business again after receiving an intra-state exemption from the California Department of Corporations. This meant Californian residents and businesses could make loans, with anyone in the US able to borrow.
However, with SEC registration still not completed, it performed a U-turn less than a month later and stopped accepting loans again.
Now, in a blog post on the site, CEO Chris Larsen says: "Finally… the moment we and so many supportive and loyal Prosper community members have been waiting for… after nine long months of navigating the rapidly changing regulatory landscape, we are thrilled to announce that Prosper's registration statement with the SEC has been declared effective."
The site will continue to work as before but with the addition of a secondary market, where lenders can buy and sell Prosper loans "notes" to each other. The risk rating system has also been tightened up, with loan listings by individuals needing to meet a minimum credit score requirement of 640.
However, the planned introduction of an Open Market initiative, where vetted finance companies can post loans on Prosper and invite bids, appears to have been put on hold.