I was informed this morning by an astute reader that Prosper.com has discontinued lending for Pennsylvania based lenders. Seems like there’s quite a bit of buzz flying around about this. Here’s the official e-mail that was sent out to lenders (Thanks to Tony for sending this to me!)
Dear XXXXXX,
We are writing to inform you that we have made the decision to discontinue accepting new lender registrations, and new bids from existing lenders, from residents from the Commonwealth of Pennsylvania. Our decision to make this change was based on our ongoing discussions with regulators in Pennsylvania, which led us to believe the change was necessary to comply with their current interpretation of their state regulations.
You will continue with your existing lender agreements, have your existing loans serviced, and be able to transfer funds out of your Prosper account. However, you will not be able to place new bids on listings or transfer money into your Prosper account.
This change does not affect borrowers residing in Pennsylvania, who remain free to create loan listings on Prosper.
We apologize for any inconvenience this change may have caused.
We thank you for being a member of the Prosper community. We hope to make Prosper available to lenders in Pennsylvania again soon.
Regards,
Prosper
You can read Prosper’s official announcement about this here along with some lively discussion… I was curious how many lenders this would effect, so here are some statistics about PA based lenders. Note that this may not be complete since I don’t have location data for every lender.
- Total Lenders From PA: 760 (296 of which have placed bids in the last 30 days)
- Total Money On Loan From PA Lenders: $1,026,354
Largest PA based Lenders:
- CapitalAssurance ($67,633)
- batblackburn ($62,897)
- rogierunr1 ($56,736)
I certainly hope that Prosper and the powers-that-be in PA get this straightened out soon.
9 responses so far ↓
1 Jon // Sep 17, 2008 at 10:25 am
As a PA resident and prosper member I too hope this gets sorted out. I am a small time player, but Prosper has been my best investment ever and now it is gone.
2 Tony // Sep 17, 2008 at 10:43 pm
Eric – Thank you so much for posting on this situation.
I especially appreciate your sharing the number of Pennsylvanians that are affected by this. Considering that we probably make up only 2.5% of the investing age of the population it’s vital and means a great deal that this information is being shared and passed along.
I hope that ANY Prosper member who comes across this will sympathize with what PA Lenders are up against, and will sign our petition at http://www.ipetitions.com/petition/pa4prosperlending/index.html
You can sign anonymously and please know that every signature counts!
I hope to continue adding more information on the Pennsylvanians for Prosper Lending Blog http://pa4prosperlending.blogspot.com/
Thanks again!
3 Tony // Sep 17, 2008 at 10:57 pm
I’m sorry, it’s late and my calculations were off! Let’s try again, it’s more like 0.026% of the legal-aged population.
I’m rounding to a population of 12,500,000 x 23% (over 18) = 2,875,000
760 / 2,875,000 = 0.026%
4 Chuck Veazey // Sep 20, 2008 at 10:24 am
Only in PA do we have beuracrats that would stop this. Once again, our wonderful government taking away opportunity to gain wealth. I just joined Proper 30 days ago and have invested a small amount of money to see if this was a possible opportunity. I have concluded that the returns for the risk are excellent. I was prepared to invest 20K into Prosper this week and found out I couldn’t. I live approx 20 miles from the OH line. I wonder if there is a way to get around this….maybe put a PO Box in OH as an address…Any thoughts ???
5 Nathan Anderson // Sep 22, 2008 at 4:45 pm
South Dakota lending was discontinued as of August 22nd. I am not sure how many lenders were in SD, but I myself am disappointed. I am looking for another investment, with hopefully similar returns.
I was wondering where you found the info on the lenders, as to what state they reside. Any stats for SD? Thanks!
6 Marc Dlugos // Sep 23, 2008 at 11:19 am
From the research I have done on the topic, it seems that the problem isn’t necessarily with Pennsylvania but rather with Prosper. I can’t imagine why a business such as this would turn away investors with such an ignorant cold shoulder. There is a new p2p website that will be open for business soon, and we Pennsylvanians will be able to take our money there.
7 Investar // Oct 6, 2008 at 8:21 am
Actually, Marc, we Pennsylvania lenders cannot move to “the new” P2P site. Re: to my inquiry from Michael Solomon at Loanio customer support:
“… you have found is a mistake in our text that needs to be addressed … if you were to attempt to register as a Lender and you are a resident of PA, our system would not allow you as we are NOT accepting Lenders there unfortunately at this time. We will keep you updated in the progress concerning PA and Lenders.”
8 Michelle // Jul 21, 2010 at 12:47 pm
Do you have any updates on Prosper opening back up PA? This has been way too long. I was just getting started and the rug was pulled from under my feet.
9 Eric // Jul 21, 2010 at 3:23 pm
Nope, as a matter of fact, lending is unavailable in quite a few states after Prosper’s re-launch (including my state of Michigan)
Leave a Comment