Updated T&Cs

Hi Am,

The changes are reasonably substantial and I have not provided a tracked version I'm afraid. I will do so from now on. 

Kind regards

Sophie

Here you go if anyone wants to compare

Previous T&Cs (archived Nov 2016) web.archive.org/web/20161024152511/https://www.moneything.com/lender-agreement/

I noticed the new T&Cs refer to interest being paid from drawdown. I glossed over that at the time because loans have all been drawdown before listing, but, having subsequently discovered that MT are no longer prefunding loans, I now expect that this was one of the changes.

I can see why the FSA might look askance at prefunding loans - the platform's capital could end up tied up in failed loans, and it has put a crimp in the size of loans that could be floated - but on the other hand waiting days, weeks, months, for a loan to fill doesn't seem desirable either. How do MT intend to handle a case when a loan is slow to fill? Do they need to introduce underwriters. Do they want to float a loan to MoneyThing Underwriters Limited, and would we want to participate?

I dont see any particular reference in the T&Cs to wind-down procedures in the event of MT collapse

However, I note in the FAQ that MT will be handling their own loan book wind down which is a bit surprising but presumably something the FCA allows.

On the point raised about interest. To date MT have been interest regularly on the anniversary of term whether the borrower pays interest at term, monthly or in advance, will this change going forward with interest only being paid when borrower pays?

Hi ilmoro , am and elliotn ,

To answer your questions: 

1. Yes we will offer instant drawdowns. We will fund this out of our fees and if a loan doesn't fill, we'll use underwriters which we already have in place. We plan to give the same kind of timeframe as we usually do- 48 hours- for a loan to fill, but we may adjust this on a per loan basis depending on how things go under the new way of working. 

2. Sorry I don't have one tracked version of the T&C's as this has gone through many iterations over a number of months. 

3. Wind up process- the terms state: "We are required to inform you of the measures we take to ensure that any Loan Agreements in which you participate continue to be managed and administered, in accordance with the terms of the Loan Agreements and these Terms, if we cease to operate the Platform. At all times we manage our Loans in such a way to ensure that income we earn from Loan Agreements is sufficient to cover our costs of managing and administering those Loan Agreements during any winding down process, taking into account the reduced number of Loans and reduced fee income from them." 

We have a more detailed 'living will' document that specifies exactly how we will do this and this has been approved by the FCA as part of our authorisation. 

4. Interest- we will continue to pay lenders any interest due monthly. We have not until recently informed lenders about how this interest is paid. Often MT cash flows the interest payments if a borrower has paid late or if the loan agreement is an interest roll-up. When we do this we obviously take the risk on the interest not being paid by the borrower, however it works well as it keeps operations smooth.

More recently, we have started to make efforts to communicate this to lenders and we are in the process of changing all our loan descriptions to make it clear what is happening about interest payments. In fact we are trying to make all loan descriptions more informative. This will help lenders better assess risk. 

5. option to cancel loan parts if a loan doesn't fill- this will be loan specific and we will specify the raising time period in the particulars. As stated above, we will by using the 48 hour period as we have previously used, but may adjust this depending on how things go. 

6. which T&C's apply to Putney: the new lender T&C's apply to this loan. You raise a good point in that you signed up to the old conditions when you invested. The timing of this loan was unfortunate, but couldn't be helped. I think the best thing for us to do on this loan is to email all lenders to ensure that everyone is aware that the new terms apply to this loan and to give everyone a chance to exit from it if they are not happy to continue under the new terms. It isn't an option for us to continue on the 'old' basis as we must comply to the conditions set by the FCA.

In regards to which T&C's apply to which loan- I'm not going to answer that here. We'll be sending out a full communication next week about how lenders are affected by our authorisation and this will be answered then. 

Kind regards

Sophie

Thank you SophieThing for the clear answers, nice to see you juggling your twin responsibilities so well!

OOOOH! missus