Last week a tragedy occurred in San Bernardino, California. Since that time the media have been covering the story from every possible angle as they typically do. Then yesterday, Fox News reported that one of the shooters, Syed Farook, took out a $28,500 loan from WebBank. I thought that was curious because I know that WebBank doesn’t make consumer loans but they do originate loans for Lending Club and Prosper among others.
It soon became clear that the loan likely came from Prosper and suddenly P2P lending was dragged into the media circus. I have lost count how many interviews I have done in the past 36 hours and how many times I have had to answer such ridiculous questions as:
- Is P2P lending going to become the new way for terrorists to get funding?
- Prosper must have really low standards to allow a loan like this to be approved, right?
- Shouldn’t the government crack down on these unregulated lenders like Prosper?
There have been many similar questions along these same themes. I didn’t really want to write about this but with all the persistent headlines today and yesterday I felt that someone in our industry needed to say something. Prosper would not comment on the story on the record. They would not even confirm or deny the existence of such a borrower on their platform, citing privacy laws. Here is their official response:
Prosper is prohibited by law from disclosing any non-public, personally identifiable information regarding any loan originated through our platform. All loans originated through the Prosper platform are subject to all identity verification and screening procedures required by law, including US anti-terrorism and anti-money laundering laws. As part of our standard procedures, we also confirm that all loan funds are disbursed into a verified US bank account in the borrower’s name. Like all Americans, Prosper is shocked and saddened by recent events in San Bernardino.