If anyone has dealt with the brunt of regulation on the P2P lending space, it’s Prosper. They’ve been through all kinds of regulatory hurdles, and as mentioned earlier, are once again in a quiet period after a brief re-launch last month.
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.
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9 comments:
FWIW, I started my Prosper acct in VA, but now that I am in DC and I cannot make new loans with Prosper, I was going to sign up with Lending Club, but I can't.
Any reason why you couldn't open an account with Lending Club? Also, Pertuity Direct is an option--it's a little less personal though.
Microplace is offering something like 6% interest.
Right now Lending Club is only open to lenders from the following states: California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Minnesota, Mississippi, Montana, New Hampshire, Nevada, New York, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin, West Virginia, and Wyoming. They have filed for registration in all other states so hopefully DC will be added soon.
Oh, I'd forgotten about that. What a pain. :-(
Supposedly you are allowed to purchase pre-existing loans. I'm in MA and that's how I'm rolling.
Michael, are you talking about Prosper or Lending Club?
Tom, I'm referring to Lending Club. I talked with a representative from LC a few months ago regarding my account. I had opened one without knowing some of the specifics about funding new loans and was going to close the account. She informed me that the trading platform would be open to all lenders. In this way, anybody can purchase notes that originated after LC re-opened, contingent on the asking price. The actual value of this debatable since it's up to the owner to set a value, and the trading platform shaves off 1%. At this point, nobody has told me I couldn't do it as a resident of MA.
How much have you traded on Lending Club?
I'm small fish, I've only purchased about $2k so far. I'm trying to buy notes that are listed at or below par, which can be challenging on the higher quality notes. I'm also rather unimpressed by the filtering process offered by the third party trading site. It's worked out well so far, but it's really the only game in town at the moment.
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