shimself
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Post by shimself on Jul 28, 2015 20:39:39 GMT
I'm pleased to report I made 1 complaint to the P2PFA, and also 1 suggestion, and I got replies to both (after 3 weeks but hey ho)
The first was an ongoing moan about lendinvest not being p2p, and not qualifying as members of the association (which has as a rule member companies must Operate to a significant extent by means of direct loan contracts between borrowers and lenders.)
The second was a suggestion that
loans to business should always be advertised for (72 hours?) before any bids are accepted, the logic being that otherwise people are incentivised to bid before they have a chance to do any DD and thinking
Which they will discuss at their next Board meeting. What do others think about this?
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Post by bracknellboy on Jul 28, 2015 21:08:11 GMT
On your second point. Some nuance is required. RS is p2p by your first definition, but its business model means that your second would be inappropriate. OK, so maybe that is the screaming exception that proofs the rule. However there are other 'exceptions' I would suggest.
FC posts such limited information that enforcement of such a preview period is surely unnecessary.
Additionally it also seems to run counter to platforms which have auto bid like funcationality targeted at diversification within certain parameters but without the lender caring about the specifics of individual loans.
As a cynic I would say that a large number of lenders don't review the material that is there on many platforms, and if they do are not necessearily equipped to make overly informed decisions.
In general I am more of a fan of allowing many different models to flourish and let the market decide which they like by voting with their feet. Different punters want different things, and I suspect the mass market actually resides with the "stack 'em high, stack 'em thin" approach which is unsuited to investment of time into loan by loan DD.
So I would 'vote against' your suggestion on the basis of it being an unnecessary constraint to be applied industry wide, while at the same time would lobby the likes of TC to revert to their prior 48 hours pre-listing to enable exactly that.
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pikestaff
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Post by pikestaff on Jul 28, 2015 21:13:38 GMT
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james
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Post by james on Jul 29, 2015 7:55:42 GMT
I assume that the P2PFA will jut change their rule rather than barring the providers that don't use direct borrower-lender contracts. Other candidates for barring would include:
1. Ablrate. Loans can be to special purpose vehicles rather than the underlying owner of the asset on which the loan is secured. But some are direct so it may pass the significant test.
2. MoneyThing. All lending is to MoneyThing that has already done the lending. The loans, though, are secured by a charge on the assets of the ultimate borrower.
Both of those could be resolvable by accepting lending where the security is that of the ultimate borrower and where the security is in the interest of the ultimate lender, not the platform.
More generally, though, I assume that P2PFA would want to be the main representative of the lending-based alternative finance world in the UK and may do useful education about various classes of contracts while permitting the full range of models.
I don't agree with your second suggestion because it has significant adverse effects. bracknellboy has mentioned the automated lending issue but it also adds a delay to possibly time-sensitive borrowers. I do agree that some time reserved to view documents would be desirable, just not three days. An hour or two, perhaps, when appropriate for the platform and only for non-automated lending.
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shimself
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Post by shimself on Jul 29, 2015 20:36:16 GMT
re lendinvest, they are in discussion. I've had a personal response from LI asking me why I'm unhappy, so still no acceptance there of the problem
re 72 hours (or whatever), I can't see how it stops autoinvestment, actually what inspired this was that I wanted to opt out of some FK autoinvested loans as the filtering is too crude and it seemed a way of achieving that, and then thinking about it it just sounded sensible to me.
I can't agree with the comment about the borrower being under time pressure, I bet they've spent a month beforehand jumping through hoops (I definitely hope some time has been spent on due diligence before it comes to us). The fact that not everybody doesn't do DD shouldn't handicap those of us who wish to do sensible DD (and in a world where banks are still repaying PPI etc anything which helps a platform to say that they have given investors proper opportunities to think sounds a good idea to me)
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