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
#creditunions celebrate #EarthDay2015 by being green aware with e-statements, hosting shred events, planting trees
11 hours ago
From @WSJ: 33% of companies say it took them more than 1 yr to discover a data breach. http://t.co/a0MxV68X6t http://t.co/lkglx6WvKs
15 hours ago
.@CAMCouncil taps into @MICreditUnions' career, tech training resources http://t.co/sotnfCUgIo
16 hours ago
#Inflation ticks up in March, still relatively flat #NewsNow #Market http://t.co/PyAvwdkJ4M
17 hours ago
#NewsNow Ill. league groups elect board, exec officers http://t.co/KAG8MtbGsv
17 hours ago