Wednesday, May 27, 2009
I was surprised to come across a lobbying report filed by their firm, Podesta Group, a major player in the Beltway scene showing a $60,000 expenditure on lobbying for first quarter of 2009.
What surprised me most is the figure--$60,000 over three months—not an outrageous figure, but remarkable, as they appear to be the only P2P lender that has any lobbyist presence in DC. Why so much when nobody else in the business seems to think it's a worthwhile expense?
As a former lobbyist myself (on the state and local level), I would have actually expected all of these firms to be lobbying, but when I checked in with Lending Club and Pertuity Direct, I was told, respectively “no comment” and “We are currently not supporting any active lobbying on behalf of the P2P space. Not sure what Prosper is doing.”
Most companies seeking changes to improve their business’ regulatory environment have a presence in DC somehow. Often this is through a trade association or contracted firm such as Podesta. The lobbyists for the agency would be working with the agencies and officials that would be regulating their business space, in this case, the Commerce Department, SEC, and any Congressional committees that deal with banking and finance.
However, as I read through the Podesta Group’s report (publicly available at http://www.opensecrets.org/), I see that Prosper hasn’t been lobbying the expected committees and agencies alone, but also lobbying the Exec. Director to the Congressional Black Caucus, and the DOL Employment Standards Administration , the Secretary of Labor’s office, and in the House of Representatives, the Budget, Appropriations and Oversight committees. An interesting combination for sure.
Why Appropriations, Budget and Labor? I can’t help but wonder if Prosper is working on a new initiative? As Prosper is still in a quiet period, so they aren’t answering questions yet, but once they’ve re-launched, I for one will be excited to hear what they’ve got in the works.
Jessica Ward is a freelance writer and blogger based in Seattle. She writes about finance, business and family. You can follow her on Twitter as @jessc098 or visit her Web sites at www.jessicaward.me or www.pennywisefamily.blogspot.com.
Friday, May 22, 2009
The same banker added my husband to that same account the day before we got married (I was practical, I wanted him to be able to pay for dinner on our honeymoon).
As I’ve moved around, I’ve gotten to know people in the branches in the three different counties that I’ve lived in, with a 100 mile spread. My local branch cheered me on as I boldly opened my business account in the depths of recession. They’ve met my kids, they know my name.
They call occasionally to tell me I’ve made a math error on a deposit slip or something, but generally, they’re a nice, standoffish, reliable bank (exactly what I want in a bank I think).
Recently, I wrote about choosing to refinance my mortgage from our 30 year fixed rate to a 15 year mortgage. I wrote about Smart Hippo, and immediately got a follow from three SmartHippo twitter Accounts (@smarthippo if you want to follow their "tweets").
I shopped the amazing deals on SmartHippo and came away armed with the security of having a really, really good idea of what’s going on in the market, and I called my bank and asked them to make me a deal I couldn’t refuse. They did.
A few weeks later, I was surprised to hear from Smart Hippo again (via Twitter) saying “how’s that re-fi going?”
Whoa!! Step back a minute! This is a FREE service, and they have no need to work hard to retain me as a customer—how often does someone refinance? This is something new and different… a relationship with a financial services provider online…..
Yesterday we closed on our loan with Columbia Bank at 4.6%. Today, as I stepped out my door with the kids to walk them to school, a woman arrived carrying a box. Inside was this cake from Smart Hippo congratulating us on our refinance.
Well, we’re “tickled pink” by the prospects of owning our home outright 20 years sooner, but it’s cool to know someone else is excited about it too, and the kids…. Well, let’s just say, the cake has been the topic of the day and they keep asking when they can eat dinner so they can bust into the cake.
The poor delivery woman seemed confused though. She looked at me blankly and said “Let me get this straight. You refinance your house and a pink hippo sends you a cake?”
My oldest daughter said “Yes, I think that’s about it.”
The cake lady shrugged and left laughing.
Thanks @SmartHippo for managing relationships with your clients and showing the power of social media to spread the message. How often is it that we find a company or product that we’re so happy about that you want to broadcast it? I do this frequently on Twitter and have many Twitter followers within the companies. I’ve asked for web site and tech support help, and posted product requests (for instance “hey, Mint, I really want to see my assets in my account so it doesn’t look like a black hole) and Smarty Pig has helped me with several questions all via Twitter or Facebook.
In the spirit of #FollowFriday here’s my list to check out—companies that I’m super-happy with (as a customer) and would without hesitation (and with no need or expectation of baked-goods in return) recommend to others. @SmartHippo, @SmartyPig, @RobGarciasJ (from Lending Club) @Lisa_Pertuity (form Pertuity Direct) and @Mintdotcom. You can follow this blog @prosperlending.
Got an opinion? Tweet me at @jessc098 and tell me all about it (but I’m afraid my startup budget doesn’t include baked goods), so you'll have to settle for a prompt reply.
Jessica Ward is a freelance writer in Seattle Washington. She blogs about motherhood, adoption, personal finance and business. You can read more about her at http://www.jessicaward.me.
Tuesday, May 19, 2009
Look out Lending Club, Pertuity Direct and Prosper, Canada’s IOU Central is on its way to America.
IOU Central filed a registration statement with the SEC on May 13th in which they seek to “register the offer and sale of up to $225,000,000 in aggregate principal amount of Borrower Payment Dependent Notes.” The notes are to be offered on a continuous basis following the effective date of the registration statement.
According to the company’s press release notes “will be issued in series and the proceeds from the sale of each series of notes will be designated by the registered lenders who purchased the series of notes to fund an unsecured consumer loan originated through the IOU Central loan marketplace to a registered borrower.”
IOU Central first made news by becoming the first p2p lending company in Canada in February 2008. They were only open a couple of weeks before they halted operations to 'resolve a regulatory matter'. We are still waiting for the first p2p lending company to open in Canada. Right now the most likely contender is CommunityLend.
IOU Central purchased a P2P lending startup from Denmark called Fairrates. Fairrates was built in 10 months by Arkadiusz Hajduk and opened in April 2007. They had lenders willing to invest but had a problem finding and vetting good borrowers. In Denmark there is no access to credit history and Fairrates was hit with a couple fraud cases.
After little success in Canada, IOU Central will try its luck in the United States. Prospective borrowers and lenders registering on the site receive the following email:
Thank you for your interest in IOU Central!
We are getting ready to release an online marketplace that will revolutionize peer-to-peer lending. Our platform will give borrowers the benefit of a true marketplace that allows for better interest rates. The platform will also give lenders freedom in lending with our real-time bidding system. We will keep you notified of our progress as we register with the Securities and Exchange Commission (SEC).
Thanks for being a part of the IOU Central revolution!
See you soon!
The entire IOU Central team
We love hearing from you, so if you ever have any comments,
questions, feedback, ideas, etc. please don't hesitate to email us at
firstname.lastname@example.org. We have a lot in the works, so visit ioucentral.com
IOU Central is a peer-to-peer lending company. The company’s internet-based loan marketplace enables borrowers to post loan requests and purchase notes from lenders. IOU Central launched in Canada’s Peer to Peer lending space in February 2008, but stopped shortly thereafter due to regulatory conditions. IOU Central is headquartered in Kennesaw, Georgia in the United States.
Jessica Ward is a freelance writer and editor, based in Seattle, WA and writes in the personal finance and microfinance space. You can check out her other work at www.jessicaward.me.
Monday, May 18, 2009
Ms. Otero is a native of La Paz Bolivia and has been part of ACCION since 1986 and CEO since 2000. She was honored in 2005 in Newsweek’s special report “How Women Lead” and was regarded as one of the 20 most influential women in the United States. She received Hispanic Magazine’s “Latina Excellence Award” and has also been featured in the magazine.
Since 1997 Ms. Otero has been an adjunct professor at the Johns Hopkins School for Advanced International Studies (source: Leigh Bureau speakers bureau).
The position of Undersecretary of Global Affairs in the U.S. Department of State is responsible for U.S. foreign relations on a variety of issues including democracy, human rights, environment, health, population, trafficking in persons, influenza and women’s issues among other things.
Catherine Quense, the Chief Deputy at ACCION will assume Ms. Otero’s duties immediately while the board conducts a global search for a successor.
ACCION is an international private non profit organization with the mission of giving the poor the financial tools that they need to work out of poverty. They provide microloans, business training and other financial tools. ACCION has disbursed more than 28.5 million loans in the last ten years, which total $23.5 billion USD (Source, PR Newswire).
Jessica Ward is a freelance writer and blogger who covers frugality and the financial sectors. She is based in Seattle. For more information, visit her Web site at www.jessicaward.me or follow her on Twitter as @jessc098.
Sunday, May 17, 2009
The debt supply was abundant back in 2005, when Renaud Laplanche dreamed up Lending Club, now one of the best known of a batch of companies that have added Web-enabled “peer to peer” lending to the ways that individuals can borrow money. Like many online innovations, it adds scale to an old idea. In this case the old idea is borrowing money from your social network — “social network” having morphed from the people you have a personal connection to into its contemporary iteration of people connected by computer screens and servers. While starting up another company, Laplanche found it financially advantageous to borrow from friends, and he wondered whether an Internet version of this idea could be created for people without flush contacts.
...Certainly the credit crunch that started last year has made a lot more people interested in new forms of borrowing. “To some extent, we got lucky,” Laplanche admits. A little more than half of the requests involve restructuring current debt with better terms. These really took off recently, as credit-card companies jacked up rates on some balances. Meanwhile, someone has borrowed $25,000 to finish a recycling plant in Uganda; others are paying off college loans or covering medical bills. And some requests seem surprisingly dissonant with the downturn: home-renovation projects, somebody asking to borrow a few grand to take the family to Disney World, a triathlete who wants a new bike. “There’s a guy buying a pony,” Laplanche adds.
Open an account with Lending Club here.
Saturday, May 16, 2009
For those who didn't know, my PenywiseFamily blog is all about a family learning to live on less and doing more with it. (That would be the family of yours truly). We've recently launched a contest for others who want to join us in chopping up those credit cards and going debt-free.
A $100 prize (either a SmartyPig gift card or a Kiva Gift Certificate--winner's choice) will go to the person who submits the most creative photo of a recycled credit card by June 15th. You can email entries to me at email@example.com or follow along the contest at www.pennywisefamily.blogspot.com.
Saturday, May 9, 2009
Prosper is Currently in a Quiet Period
We have been overwhelmed by the outcry from potential investors around the country who want to participate in peer-to-peer lending. Thank you for your support and your letters to us.
After much consideration we have decided to voluntarily shut down our operation in order to complete our SEC approval for a nationwide peer-to-peer lending platform. As a result, due to regulatory concerns, and in the interest of working toward getting our registration statement effective as soon as possible, we are discontinuing our California intrastate offering at this time.
If you're an existing lender, your current lender agreements will be unaffected; your existing loans will continue to be serviced; you'll be able to track and monitor your loans; and you'll be able to withdraw funds from your Prosper account.
If you are a borrower with an existing loan, you will continue with your current borrower agreement and be unaffected by the registration process.
We want to assure you that Prosper is looking forward to being able to offer a transparent, durable and participatory lending institution very soon.
As a result of this decision, we will not be accepting new lender or borrower registrations or loans, or new commitments from existing lenders effective immediately. Until this process is complete, we are required to be in a quiet period and will be unable to respond to press, blogger or other inquiries related to our SEC registration process, even though we would like to.
We sincerely apologize to the Prosper community members for this inconvenience or disappointment our decision may have caused. We want to thank those of you who demonstrated your support through your active participation whether by investing with us again or referring friends to our site.
Thank you in advance for your understanding, support and patience once more. We look forward to serving the needs of the community in the hopefully not too distant future.
While Prosper is closed, Lending Club has the full blessing of the SEC and has facilitated nearly $40 million in loans.
Friday, May 8, 2009
Thursday, May 7, 2009
Here's a response that you can post on the blog. LMK if you think I could be more effective. We really do care about this stuff and work hard to make a great product. We missed something on this one and we learn from it and move on.
Thanks for your ongoing coverage of DebtGoal.com. You've been a great supporter and have given us a lot of valuable feedback that has truly helped us create a better service.
As you pointed out in your recent blog post, we did experience a bug last Friday where we sent out a limited number of monthly progress report emails with inaccurate statement data. We traced the issue to a memory buffer error that failed at high volumes to clear after each email was generated. We have implemented a fix for this bug and resent corrected monthly reports a few hours after the issue was identified.
We apologize for the error, as we know that you and our other users put your trust in us to help you manage your finances. As a result of this issue, we are revising our Quality Assurance practices to better detect these issues through automated validation and live error detection. It's never possible to eliminate all possibility of errors, but the changes we are implementing will lead to much more robust releases.
Above all, I want to communicate that we do take quality and security seriously. We will continue to proactively improve our processes and quality. As we're in Alpha release, some of this QA work is done by our users and we remain very appreciative for the suggestions and feedback that we get on a daily basis and thankful for their understanding when things don't go exactly according to plan. Thanks again for your support and feedback.
Friday, May 1, 2009
Mostly, I was surprised because I've never had a Target card. I've also never had a credit card with a 20% interest rate. I'm sure you can imagine my shock!
That said, I'm sure someone else was even more surprised when they opened their DebtGoal statement and discovered that they owe USAA the cost of roughly one month in Africa plus airfare for three. (Sometimes I still surprise myself).
As it turns out, a "glitch" occurred in DebtGoal's system that mistakenly sent someone else's statements to "a limited number of users."
Thankfully, DebtGoal doesn't actually collect account numbers, and I didn't receive any identifying information about the person whose statement I received. I communicated with DebtGoal and was told it was an error, which affected only some of their users, and a few hours later received an accurate statement.
It did get me reconsidering though. I leave all of my organizing to the Web. I'm responsible for little file storage or organization of actual "paper" some free Web service is out there for everything. My digital photos are all stored online (presuming this to be FAR more reliable than my hard drive or a DVD my kids are likely to turn into a school construction project).
According to an article from TechCrunch in April, Facebook, Twitter and Google Documents have all recently had similar breaches. I myself have experienced mis-directed Twitter tweets, and even some people have complained of trying to view my profile and getting someone elses' (usually SPAM-intense or otherwise offensive) profile.
Just how much faith should we have in the cloud? What can our providers do to ensure that we won't have our personal information or bank account balances eventually being tied to our google profiles because of some security "glitch."
Which brings me to my last point...someone must distinguish the lines between a security "anomaly," "glitch," "error," "leak," and an all-out "hemorrhage."
Don't be mistaken, I'm not unhappy with DebtGoal, they didn't release sensitive information to me, mostly just confusing. I don't think they even store sensitive data (their structure wouldn't require it). That said, other sites I use regularly do. Sometimes I use a favorite site like Amazon, Paypal or other to see what my credit card number actually is--as I shredded it a few months ago. If they're the only ones that still know my credit card number, I really want to make sure its safe. Exactly how much should we be trusting "the cloud?"
Update: DebtGoal responds to security breach
Jessica Ward is a freelance writer from Seattle. She writes on personal finance, technology and family. To learn more, visit www.jessicaward.me or follow her on Twitter at @jessc098