• Yesterday, the SEC issued its formal cease-and-desist letter outlining its reasoning for characterizing Prosper and other P2P Lending destinations as ’sellers of investment’.
• Prosper, the first mover in this space had been trying to ditch the stigma that they were selling investment, but they absolutely were. Now they must register with the SEC to relaunch the business; a process that can take months.
• With so many Americans in trouble now, and unable to get credit, these niche marketplaces for loans have turned into ‘business to consumer’ lending havens and they should definitely have to register with the SEC
• New to the scene, Loanio also has to shut down until the SEC approves their registration. This is good news for Lending Club, the Facebook app that filed with the SEC in April and is about to get approved for every state next week.

TC