Prosper still uses the word "bid" in describing lender investment in a loan, but the recent changes to its model have ultimately removed the bidding process from the platform.
Galloway, supra note 8 (stating that Prosper hopes borrowers will feel more obligated to repay their loans by organizing online social groups, linked by interests or alma mater); Sengupta & Aubuchon, supra note 2, at 11-12 (explaining that most economists credit the success of the Grameen bank to its group lending contracts which put social pressure on borrowers to repay loans).
See How to Create a Successful Borrower Listing, PROSPER, http://www.
See Prosper Annual Report, supra note 46, at 34 (explaining that the notes were not registered under the Securities Act from February 2006 through October 16, 2008); LendingClub Corp.
concluding that additional safeguards are needed because there is no other regulator to protect lenders from the risks presented by the Prosper platform).
Prosper Cease-and-Desist Order, supra note 91, at 5-6 (concluding that Prosper notes are securities because lenders are motivated by an expected return, the loans are offered to the general public, reasonable investors expect that the loans are investments, and there is no other regulator reducing the risks to investors).
outlining the requirement of an investment of money, which is clearly present with Prosper notes).
See How Lending Club Works, A More Efficient Model, supra note 48; How Prosper Works, supra note 82 (explaining how each platform can provide investors with better returns by avoiding traditional intermediation).
at 66 (listing a note delivered in consumer financing, a note secured by a home mortgage, a short-term note secured by a lien on a small business, a character loan to a bank customer, and a short-term note secured by accounts receivable as examples of notes that are not classified as securities); Prosper Cease-and-Desist Order, supra note 91, at 4.
See Online Investing and Peer-to-Peer Lending, PROSPER, http://www.
See How Does Lending on Prosper Measure Up Against the Stock Market?
Schmidt & Westbrook, supra note 18 (noting that Prosper makes more disclosures to the SEC than almost any other company).
Each borrower credit profile includes the Prosper Score, credit scores, delinquent accounts, credit inquiries, credit lines, revolving credit balance, homeownership, debt/income ratio, occupation, employment status, and state of residence.
Prosper Annual Report, supra note 46, at 35 (noting that Prosper is a licensed lender or loan broker in a number of states).
See Brush, supra note 15 (quoting Chris Larsen, Prosper CEO) ("Every month that goes by, P2P lending is getting pulled away from what it could be: the purest form of community banking.