I received a new "State Financial Suitability Requirements" notice this morning as I logged into my prosper account. Basically Washington State is deciding whether or not it's wise for people to invest in peer to peer lending. If you don't meet their requirements then you will be breaking the law if you continue to lend.
How long until we see these sort of requirement before one is allowed to invest their own hard assets in the stock market, real estate, heck why not even charitable giving?
For the record my small Prosper investment has payed out 12.44%. That's way more than any of my other more traditional investments. I also appreciate the fact that it gives me the ability to lend capital directly to people and businesses who are in need at a time when we continue to hear news stories of frozen capital markets. Is prosper a risky investment? Oh heck yes, but if investors know that going in and aren't expecting any sort of bailout in the case of lose, then stay the heck out of my financial dealings! I wouldn't be surprised if banks or other financial institutions had a hand in drafting these requirements as they would rather individuals be forced to lend their capital through them rather than via a more direct channel.
State Financial Suitability Requirements
The state of Washington has financial suitability requirements.
1. Financial Suitability Requirement:
The Notes are being offered only to a lender (a husband and wife are treated together as one lender) who satisfies the suitability requirements set forth below. You must meet one or more of the suitability requirements (a-b) in order to purchase Notes from Prosper.
A - I have an annual gross income of at least $70,000 and a net worth as set forth below, of at least $70,000, and I will not purchase Notes that in the aggregate, exceed 10% or more of my net worth as set forth below, or
B - I have a minimum net worth of $250,000 and I will not purchase Notes, that in the aggregate, exceed 10% or more of my net worth as set forth below.
Note: Net worth is calculated exclusive of home, home furnishings and automobiles, and Lender members may not value assets included in the computation of net worth at more than their fair market value.
2. Certification under Penalty of Perjury:
The undersigned has carefully read this Suitability Questionnaire for Individuals and confirms, under penalty of perjury, that the information contained herein is accurate, true and complete and if there should be any change in such information at any time, the undersigned will immediately furnish the revised or corrected information to Prosper.
Under penalty of perjury, I confirm that the information contained herein is accurate, true and complete and:
[ ] I confirm that I meet one or more of the financial suitability requirements in sections a or b set forth above.
[ ] I confirm that I do not meet any of the financial suitability requirements above.