Prosper.com recently paid $1 million to settle securities law violations, and they may have more trouble ahead. Securities are regulated by several organizations, and Prosper.com was not subjecting itself to regulation. The question becomes: are peer to peer lenders investing in securities or just making little loans? In particular, regulators are concerned about the packaged notes that Prosper.com handles.
If the loans are considered securities, Prosper.com will be in hot water for dealing with the general public in unregistered securities. What does that mean in English? It means that they sold something that they shouldn't have to regular folks who might not have understood the risks.
Prosper.com is not the only peer to peer lender to deal with the securities question. Loanio has temporarily stopped lending, and LendingClub went through the SEC registration process and is once again making loans.
Further reading:
Here’s something you can review for BANK of AMERICA.
“Quote”
Mid-Michigan soldier’s car repossessed while he is serving country By Terry CampFRANKENMUTH (WJRT) — (12/18/08)
– Sergeant Bernhardt Rupprecht is on his way back to Iraq after a pre-holiday visit to his family. But during that
visit, he was busy trying to settle a dispute over his car.
Just two weeks ago, Rupprecht was featured in an ABC12 news report. He was back home in Little Bavaria, helping
the family of another Frankenmuth soldier who was badly injured in a training accident.
“When I heard that I was in Iraq at the time,” Rupprecht said. “My parents told me about it and it broke my
heart.”
But while he was home, he was also trying to clear up a dispute with Bank of America — a dispute which is detailed
in a federal lawsuit.
“Bank of America violated, we believe, the Servicemembers Civil Relief Act (SCRA),” said Rupprecht’s attorney,
Julie Gafkay.
The SCRA protects military personnel from civil action, such as car repossession, while they are in a military
action. Gafkay believes Bank of America repossessed Rupprecht’s 2004 Dodge Neon while the serviceman was in Iraq.
Rupprecht got a late payment notice after his military pay was not put into his account, and once the money was
there, the lawsuit states Rupprecht called from Baghdad.
Gafkay says Rupprecht called on a satellite phone in a combat zone, asking Bank of America to reinstate payments
and to take the money he owed from his account. Bank of America refused.
She says a collection agency, also named in the lawsuit, is trying to collect $11,000. It’s a legal dispute
between a soldier and large financial institution that is also getting $25 billion in bailout money from the
federal government.
“They are receiving a handout from the very government that he is over there fighting for!” said Gafkay.
A spokeswoman with Bank of America says due to the lawsuit, they cannot make a comment at this time.
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(Copyright ©2008 WJRT-TV/DT. All Rights Reserved.)
This scum sucking institution needs to go down, as all they are good for, is to rip off as much and as many people as they can while still being spoon fed by the feds.
SHAME on BANK OF AMERICA.
I urge ALL to write your elected officals and demand a reform of policies or better yet,
PUT THEM OUT OF BUSINESS!
There are legal, non-traditional ways to do peer-to-peer social finance, such as 40billion.com. Check out 40billion.com, which focuses on entrepreneurs and helping them to raise money for their small businesses through friends and family, rather than through traditional financial institutions. It is the first friends-and-family funding network for entrepreneurs.
Entrepreneurs connect with their social networks – friends, family, friends of family, colleagues, and others – to raise capital by requesting loans and contributions, and entrepreneurs can share their fundraising pages on MySpace, Facebook, and LinkedIn too.
Check out http://www.40billion.com