garfield
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Post by garfield on Jul 31, 2019 11:22:31 GMT
I think the remediation might have only applied to loans bought on the SM after a certain date, when perhaps L became aware of facts which should have been notified to loan buyers on the SM. I bought two of them on the PM and was never offered any compensation. Between certain dates for the PBLs; the DFLs I don't fully understand, but there were complaints by some investors. See the LAG website.
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Post by samford71 on Jul 31, 2019 22:56:07 GMT
The FCA response highlights some points
The "higher return reflects in large part that this investment is generally considerably riskier –for instance, if the loan is to fund speculative property development."
From this we can infer that the FCA was fully aware what type of credit product Lendy (and, for that matter, other platforms) were offering to retail clients. Moreover, that such a product was acceptable to the FCA in the format that it was presented to retail clients by the platforms. I'd note that Lendy never themselves used the term "speculative" nor were they forced to by the FCA. In fact, neither has any other platform. Even on this forum, I'm probably the only person to use that specific terminology.
"If we had taken the decision to not authorise there was a risk that the FCA would not be able to ensure the remediation plan progressed as planned, and there was an additional question over whether any redress could have been made if the firm was unable to trade.This could have led to increased consumer harm."
This supports my previous view ( link) that the FCA found themselves between a rock and hard place. The basic error of giving them interim permission and the fact that during that period Lendy originated over £350mm in loans including a number which were not 36H compliant, meant that they felt that denying full permission would increase harm to retail investors. I suppose the total number of new loans originated post full permission was just £25mm or 6%. So to some extent the horse had already bolted. Nonetheless, I think the decision to give them full permission was an error that compounded the initial error of giving any platform interim permission. Two wrongs do not make a right.
What this also glosses over, however, is that the firm made an application to become fully authorised on 30 March 2016 and yet this did not occur until 11 July 2018. That's 27 months! That's a massive red flag. The obvious question here is: what was happening during an authorization process that took over 2 years? They say they were working closely with Lendy and that Lendy eventually met the Threshold conditions. Surely at some point, however, the FCA should have considered pulling the plug on Lendy. Every month that went by they were allowing the loan book to get bigger and any unwind process more difficult. If Lendy couldn't meet the Threshold conditons after 3, 6, 12 months, when do you just say enough is enough. It's like the FCA just didn't want to fail any P2P platform period.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jul 31, 2019 23:20:26 GMT
"It's like the FCA just didn't want to fail any P2P platform period" - EXACTLY! They're clueless idiots who never understood P2P from the Get Go, and still don't, but learning (V slowly) at the VAST expense to Lenders. And, of course, to the vast Profit of their introduced friends, The Administrators. It is proof positive of what we know, they have no idea about business or how to proactively protect Financial Consumers, their ONLY concern is covering their backsides from their countless incompetencies. [ if that's a real word? :-) ] Unfortunately for The FCA various MPs, Lord Myners, The Press, the Treasury Committee, and Other Authorities are now increasingly wise to their sheer ineffectiveness and uselessness. Can't see how on earth Bailey can possibly get the BoE jobby now, imagine what he could and would do to the country?!!!! 
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cwah
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Post by cwah on Aug 1, 2019 4:43:29 GMT
I really think Lendy collapse was caused by FCA.
If you put strings of additional regulation + additional cost to a company. Then at the same time prevent them to generate new cash by doing new loans... There isn't anything else than bankruptcy that can happen for a platform in difficulties!
You guys can say that the loan book was bad. But load of other platforms also have many defaults!
FCA needs to take responsability on this. They created this mess
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garfield
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Post by garfield on Aug 1, 2019 6:35:53 GMT
"At authorisation, the agreed focus was on loan recoveries and embedding a new governance
structure and management team, with input from third party professionals and advisors. In
addition, although not formally closed to new business upon authorisation, no
new development loans were offered..."
It looks to me as though the first tranches of DFL034 and DFL037 were offered post authorisation, which conflicts with this statement. According to the loan updates, both went live in the first week of August 2018.
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Monetus
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Post by Monetus on Aug 1, 2019 7:12:25 GMT
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Monetus
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Post by Monetus on Aug 1, 2019 8:41:34 GMT
The "higher return reflects in large part that this investment is generally considerably riskier –for instance, if the loan is to fund speculative property development."
From this we can infer that the FCA was fully aware what type of credit product Lendy (and, for that matter, other platforms) were offering to retail clients. Moreover, that such a product was acceptable to the FCA in the format that it was presented to retail clients by the platforms. I'd note that Lendy never themselves used the term "speculative" nor were they forced to by the FCA. In fact, neither has any other platform. Even on this forum, I'm probably the only person to use that specific terminology.
Fear ye not! Grow your capital with a fixed 1% monthly return! Earning has never been easier
"Lendy's tried and and tested model allows investors to lend funds to developers and property professionals at competitive rates that suit everyone. Professional qualified surveyors fully assess and value all property proposed as security, while in-depth checks are carried out on the borrower. As loans never exceed 70% of the property value, and all lending is secured with a legal charge, we can ensure minimal risk and deliver a fantastic return on your Peer to Peer investment." Straightforward and simple to use
"By monitoring the loans and updating our portfolio we take all the hard work out of your investment. All you have to do is choose your investment, fund your account and begin earning a 1% fixed return each month." We're safe and secure
"You can invest your funds safe in the knowledge that your data is fully protected. All borrowers and their proposals are fully assessed, and the loan is secured with a legal charge. Loan amounts never exceed 70% of the current value and we maintain a large Provision Fund so we can return your investment if the borrower defaults."
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Monetus
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Post by Monetus on Aug 1, 2019 8:49:09 GMT
What this also glosses over, however, is that the firm made an application to become fully authorised on 30 March 2016 and yet this did not occur until 11 July 2018. That's 27 months! That's a massive red flag. The obvious question here is: what was happening during an authorization process that took over 2 years? They say they were working closely with Lendy and that Lendy eventually met the Threshold conditions. Surely at some point, however, the FCA should have considered pulling the plug on Lendy. Every month that went by they were allowing the loan book to get bigger and any unwind process more difficult. If Lendy couldn't meet the Threshold conditons after 3, 6, 12 months, when do you just say enough is enough. It's like the FCA just didn't want to fail any P2P platform period.
Totally agree. The damage was already done by the time full authorisation was granted as platform confidence was already eroded. Lendy wrote an awful lot of new business during this 27 month period.
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Post by billy169 on Aug 1, 2019 8:58:06 GMT
FCA protected the business model..not the investors.
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garfield
Member of DD Central
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Post by garfield on Aug 1, 2019 9:10:00 GMT
What gets me as well is why SS were given Interim Permission in the first place. At the time (April 2014), I was investing with FC who, like the other big players, had already been in business for up to 9/10 years. Thus they were well-established in the P2P game when the industry began to be regulated (as an aside, why did this take so long?). However, SS were only just starting out, with their first property loan PBL001 being repaid in December 2014 (I can't see the start date). As they were not P2P until much later, and in fact marketed themselves as a savings product, shouldn't they have been subject to financial regulations from the start?
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Mucho P2P
Member of DD Central
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Post by Mucho P2P on Aug 1, 2019 9:10:33 GMT
"It's like the FCA just didn't want to fail any P2P platform period" - EXACTLY! They're clueless idiots who never understood P2P from the Get Go, and still don't, but learning (V slowly) at the VAST expense to Lenders. And, of course, to the vast Profit of their introduced friends, The Administrators. It is proof positive of what we know, they have no idea about business or how to proactively protect Financial Consumers, their ONLY concern is covering their backsides from their countless incompetencies. [ if that's a real word? :-) ] Unfortunately for The FCA various MPs, Lord Myners, The Press, the Treasury Committee, and Other Authorities are now increasingly wise to their sheer ineffectiveness and uselessness. Can't see how on earth Bailey can possibly get the BoE jobby now, imagine what he could and would do to the country?!!!! Agree fully, except with the word ONLY! It is ALSO to their advantage to authorise as many firms as possible to obtain their yearly regulatory fees that the numerous authorised platforms have to pay the FCA. The more firms that are authorised, the more fees come into the FCA. Known as a scalable business model!
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Mucho P2P
Member of DD Central
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Post by Mucho P2P on Aug 1, 2019 9:16:54 GMT
I really think Lendy collapse was caused by FCA. If you put strings of additional regulation + additional cost to a company. Then at the same time prevent them to generate new cash by doing new loans... There isn't anything else than bankruptcy that can happen for a platform in difficulties! You guys can say that the loan book was bad. But load of other platforms also have many defaults! FCA needs to take responsability on this. They created this mess Agree fully that the FCA are partly responsible, as they effectively did zilch to protect the retail investor. The FCA did not create the mess, they allowed to mess to perpetuate with an incompetent leader at the helm. A decent chef will make a decent meal out of low quality food, an incompetent chef will struggle to make a decent meal out of prime ingredients.
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Monetus
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Post by Monetus on Aug 1, 2019 9:24:20 GMT
What gets me as well is why SS were given Interim Permission in the first place. At the time (April 2014), I was investing with FC who, like the other big players, had already been in business for up to 9/10 years. Thus they were well-established in the P2P game when the industry began to be regulated (as an aside, why did this take so long?). However, SS were only just starting out, with their first property loan PBL001 being repaid in December 2014 (I can't see the start date). As they were not P2P until much later, and in fact marketed themselves as a savings product, shouldn't they have been subject to financial regulations from the start? Pretty much anyone could get Interim permission who filled out the form and paid the appropriate fee. This allowed you to run your business for several years until The FCA finally took a proper look at your business model in detail. You could even run a P2P platform out of your spare bedroom if you so wished (many did). In other financial sectors there are requirements for qualifications, relevant experience, "fit and proper person tests" etc. In this sector unqualified, unethical and inexperienced people were allowed to essentially "roam free" with hundreds of millions of pounds of other people’s money with barely any regulation whatsoever. By the time The FCA got around to approving many of these platforms it was already too late.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Aug 1, 2019 9:36:04 GMT
"At authorisation, the agreed focus was on loan recoveries and embedding a new governance
structure and management team, with input from third party professionals and advisors. In
addition, although not formally closed to new business upon authorisation, no
new development loans were offered..."
It looks to me as though the first tranches of DFL034 and DFL037 were offered post authorisation, which conflicts with this statement. According to the loan updates, both went live in the first week of August 2018.
Depends on how you interprete 'offered' These loans would probably have been offered to the borrower before the deadline.
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mickj
Member of DD Central
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Post by mickj on Aug 1, 2019 10:06:22 GMT
Fear ye not! Grow your capital with a fixed 1% monthly return! Earning has never been easier
"Lendy's tried and and tested model allows investors to lend funds to developers and property professionals at competitive rates that suit everyone. Professional qualified surveyors fully assess and value all property proposed as security, while in-depth checks are carried out on the borrower. As loans never exceed 70% of the property value, and all lending is secured with a legal charge, we can ensure minimal risk and deliver a fantastic return on your Peer to Peer investment." Straightforward and simple to use
"By monitoring the loans and updating our portfolio we take all the hard work out of your investment. All you have to do is choose your investment, fund your account and begin earning a 1% fixed return each month." We're safe and secure
"You can invest your funds safe in the knowledge that your data is fully protected. All borrowers and their proposals are fully assessed, and the loan is secured with a legal charge. Loan amounts never exceed 70% of the current value and we maintain a large Provision Fund so we can return your investment if the borrower defaults." Sounds great, where can I sign up..........
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