Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

CU System
Peer-to-peer lending challenges traditional lenders
MADISON, WIS. (12/28/07)--The concept of borrowing from peers rather than from financial institutions or credit card companies is gaining broader acceptance, but worries some lenders. Peer-to-peer (P2P) lending is offered by a few companies with each providing different twists in service (USA TODAY.com Dec. 26). The main reasons that borrowers turn to P2P lending are to obtain lower interest rates than most financial institutions offer and to avoid amassing credit card debt, according to a Javelin survey conducted in November. Zopa is a United Kingdom-based P2P lender that began operating in the U.S this month. It has an unusual lending model that allows borrowers with good credit to obtain a loan from one of six credit unions that partner with Zopa. Members who want to earn interest on their savings can purchase one-year Federal Deposit Insurance Corporation-insured certificates of deposit (CD) from the credit unions. The CDs pay interest rates up to 5.1%. However, the American Bankers Association (ABA) said P2P lending circumvents the operations of financial institutions by linking borrowers directly to lenders. ABA said the banking industry is monitoring this situation. The upshot is that the growth of the P2P market could be a threat to unsecured lenders--especially credit card issuers--who will have to become more competitive with rates and rewards offered to customers, said ABA.


RSS





print
News Now LiveWire
Final field-of-membership rule tops April 30 NCUA agenda http://t.co/gFIhRhUCts
3 hours ago
.@CUNA's @Nussle speaks to @VonnieQuinn about #StoptheDataBreaches and reg. relief. http://t.co/TMTubG9Afk
5 hours ago
RT @NCUFoundation: .The Foundation's @hylandhighway with @NatlJumpStart President/CEO Laura Levine at #FLHillDay2015 today: http://t.co/ep5…
8 hours ago
Seriously underwater homes rise, new-home sales tumble News Now: http://t.co/2LzWTkqnES
8 hours ago
#NewsNow Cornerstone Foundation awards $71K in grants http://t.co/Y6D8K9rwWv
10 hours ago