Legal Compliance - Prosper

Legal Compliance


The Prosper marketplace is a peer-to-peer online credit platform operated by Prosper Marketplace, Inc. ("Prosper"). Prosper handles the registration of borrowers, lenders, loan sellers and group leaders; the receipt, display and matching of listings and investments on listings; the issuance and sale of Borrower Payment Dependent Notes (“Notes”) to our lender members; and the origination, servicing and collection of principal and interest and other charges payable on loans. Our lender members may offer their Notes for sale to other lender members through the Folio Investing Note Trader platform operated and maintained by FOLIOfn Investments, Inc., a registered broker-dealer.

  • Our borrower members can post listings on the platform to request and obtain loans, which we call “borrower loans."
  • Our lender members can invest in listings and purchase from Prosper Notes that are dependent for payment on payments we receive on the corresponding borrower loans described in the listing.
  • Our group leader members can form groups of borrowers with common interests.
All loans originated through the platform are made by WebBank, a Utah-chartered Industrial Bank and sold and assigned to Prosper. Prosper provides services to WebBank in connection with the origination of such loans. Prosper services all loans made to Prosper borrowers on behalf of Prosper lender members who purchase Notes dependent for payment on such loans.

All borrower loans are fixed rate, unsecured, fully amortizing loans with simple interest. All loans are obligations of individual borrowers and not of corporations or businesses. Borrowers who obtain a loan to be used for business purposes, are personally obligated to repay the loan, regardless of the success or failure of the business for which the loan may be used. The following limits and fees apply:

Borrower Limits and Fees
Map of the United States Loan amount: $2,000 - $35,000
Maximum interest rate: 36%
Closing fee:
Prosper Rating 1 year 3 year 5 year
AA
0.50%1.95%4.95%
A
1.95%3.95%4.95%
B
2.95%4.95%4.95%
C - HR
3.95%4.95%4.95%
Late fee:
15-day grace period
The greater of 5.00% of the unpaid
installment amount, or $15
Failed payment fee: $15
State of residence: Prosper is available to Borrowers in all
US states except Iowa, Maine and North Dakota.

Lender Requirements

Your role as a Prosper "Lender" is that of a purchaser of Notes issued by Prosper. Although you are referred to on the Prosper website as a "Lender," you are not actually lending your money directly to Prosper borrowers, but are, instead, acting as an investor and making purchase commitments for Notes and purchasing Notes from Prosper, that are dependent for payment on payments we receive on borrower loans.

An investment by a Lender is the Lender's commitment to purchase a Note issued by Prosper, with the proceeds of the sale of the Note used by Prosper to make or purchase the specific borrower loan described in the listing on which the investment was made.

Your rights and obligations as a Prosper Lender are set forth in the Lender Registration Agreement.

Residence: Prosper is currently available only to lenders who reside in the following states: Alaska, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New York, Oregon, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin and Wyoming.

Lenders in the following states may be subject to suitability requirements: California, Idaho, New Hampshire, Virginia, Maine, Washington, Alaska, Missouri, Nevada and Oregon.
Suitability: For lender members who are residents of Idaho, Maine, New Hampshire, Oregon, Virginia and Washington:
Lender members must either (1) have an annual gross income of at least $70,000 and a net worth (exclusive of home, home furnishings and automobile) of at least $70,000; or (2) have a net worth (determined with the same exclusions) of at least $250,000.

In addition, no lender member located in these states may purchase Notes in an amount in excess of 10% of the lender member's net worth, determined exclusive of home, home furnishings and automobile.

For lender members who are residents of California:
For individual California lender members who purchase $2,500 or less of Notes (including promissory notes purchased prior to October 16, 2008), the lender member's investment must not exceed 10% of his or her net worth.

To purchase more than $2,500 of Notes, a California lender member's investment must not exceed 10% of his or her net worth, and either: (1) the lender member must have a minimum net worth of at least $85,000 and had minimum gross income of $85,000 during the last tax year and will have (based on a good faith estimate) minimum gross income of $85,000 during the current tax year; or (2) the lender member must have a minimum net worth, exclusive of homes, home furnishings and automobiles, of $200,000.

Assets included in the computation of net worth shall be valued at not more than fair market value; or For the purpose of the net worth requirement, both a husband and wife may be counted as a single individual.
Minimum investment: $25
Maximum investment (per listing): the requested loan amount
Maximum aggregate investment: $5,000,000 for individuals
$50,000,000 for institutions
Loan servicing fee: an annual rate of 1.0% of the outstanding principal balance of the borrower loan

Collection agency fee rate: 17%

Notes and returns on Notes are not FDIC-insured and have no Prosper or bank guarantee. Notes may lose value.

Notes purchased by Prosper Lenders are transferable only through the Folio Investing Note Trader platform.

THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF THESE SECURITIES

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT — To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.

Prosper holds the State consumer lending licenses and registrations shown below.

State Licenses
California State Flag
California
Finance Lender License #605-3227
Colorado State Flag
Colorado
Supervised Lender License #989214
Florida State Flag
Florida
Consumer Finance License #CF-0600023
Idaho State Flag
Idaho
Regulated Lender License #RRL-5106
Kansas State Flag
Kansas
Supervised Loan License #SL.0000382
Massachusetts State Flag
Massachusetts
Loan Servicer Registration
Michigan State Flag
Michigan
Regulatory Loan License #RL-0012605
Montana State Flag
Montana
Consumer Loan License & Supplemental Consumer Loan License #1008 & 1008-S
Ohio State Flag
Ohio
Second Mortgage Lender License #SM.501506.000
Oklahoma State Flag
Oklahoma
Supervised Lender License #SL006429
Oregon State Flag
Oregon
Consumer Finance Act License
Texas State Flag
Texas
Regulated Loan License #47698
Utah State Flag
Utah
Consumer Credit Notification
Wisconsin State Flag
Wisconsin
Consumer Act Registration #51500
Wyoming State Flag
Wyoming
Supervised Lender License #SL-2462
 


Last Updated: June 30, 2011