Interesting to learn how they might treat the notes differently than the company. That of course leads to the next questions, at what point do the notes become regulated and acceptable? Both Prosper and Lending Club file with the SEC and went through some heavy filing requirements to do so. Either way, lesson learned is right, don’t volunteer information!

Very interesting as well on the limits to which brokerages you can use (must be due to the ability to monitor employee’s investments). I had heard of this before from a CFP friend of mine who has experienced some limitations in the past as well.

I actually think owning a piece of LC would have been alright as an outside business activity – the notes were unregulated instruments that home office compliance wasn’t comfortable with. Might have been my “fault” for sharing that I even had the account lol.

In the same vain I actually am only allowed to use one of 10 brokerage sites (sites like sharebuilder, tradeking, etc are not on there)

Thanks for stopping by Evan!

I don’t remember the exact justification (it was over 3 years ago at this point) but it had something to do with being a registered rep and being involved in private deals that my broker-dealer couldn’t monitor.

Should be interesting to see how things shake out over the next six months. Thanks again for stopping by!

I understand that they are mad. Now they do not reap those juicy yields themselves so they are screaming.

Also I am not sure this is legal and not sure it is a conflict of interest. What I am doing as a private person with my own money is my business and not WFC’s. I would consider it a conflict of interest if employees would direct potential clients to LC for example and thus WFC would lose them. But if I am investing my own cash in the evening at home, that’s bullshit. If my employer would do this I would hire a lawyer.

I had no idea they were doing that much in lending. $300M per month each is a huge amount. In light of those kind of stats I can see the worry by the big banks. Are any of the banks invested with LC/Propser? I saw you posted that WFC makes money through the LC Trust Account. I’m curious why the ban by WFC if they currently have a stake in the improvement of LC at least. I guess I could understand a no Propser investment if WFC only has ties with LC but why both? Unless it has something to do with the IPO process, but that doesn’t really make sense given that these are individual investors that have no ties to the companies but just use their marketplaces.

Thanks for stopping by Steve!

As for the size of P2P Lending, it has the opportunity to be extremely disrupting to the current banking picture. The average loan for Lending Club was over 14k in December with approximately $300 million of issued loans between both companies during the same month. Given the historic growth trends, I would anticipate them issuing north of $6 billion in loans during 2014. That represents a potential $6 billion dollars of debt that credit card companies and banks no longer earn 29.99% interest on as the loans get paid off with a fixed term note. And all of this is just in the consumer loans arena. Lending Club is currently working on developing small business lending which would be an even larger threat for banks as they continue to develop a brand and gain traction in the lending arena.

Thanks for stopping by JC and for the great comments/questions. As an aside, I would expect you will be able to invest directly into notes with Lending Club sometime in the very near future (once the IPO has occurred).

Thanks for commenting Bryan!