NEW YORK (1/29/08)--Some comments by the Filene Research Institute, a Madison, Wis.-based research firm for the credit union industry, on peer-to-peer (P2P) lending were mentioned in the Sunday edition of The Wall Street Journal. People need to understand the P2P models being used because each model has its own nuances and differences, Mark Meyer, director of the Filene Research Institute, told the newspaper. The most distinct feature of all P2P sites is that the traditional financial institution is removed in the lending process. Because of this, overhead is reduced, which results in better rates for borrowers and lenders, the sites claim, according to the article. Zopa, which is affiliated with credit unions nationwide, requires a 640 FICO score--a proprietary credit scoring formula created and used by Fair Isaac Corporation--and a credit union membership to apply for the loan, according to the article. With Lending Club, a consumer seeking a loan needs a FICO score of 640 to apply for a loan. A borrower’s debt-to-income ratio cannot exceed 30%. Conversely, Prosper--another P2P lender--allows the market to determine which borrowers can obtain funds regardless of credit score, the article said. Virgin Money facilitates loans between friends and family members, so participants know each other, the newspaper said.