Friday, 10 October 2008

Closure of Zopa's US Credit Union Program Contrasts P2P Model

It's a sad day at Zopa, which has announced the closure of its US credit union programme due to adverse market conditions for credit union deposits and loans. My sympathy to the whole team.

But, by comparison, the steadily growing success of Zopa's UK P2P model starkly demonstrates the benefits of enabling simple, capital-efficient, transparent lending directly between responsible individuals, as opposed to the intricacies of even a straightforward savings and loan operation like a credit union.

And it's ironic that the US regulatory system could permit everything from NINJA loans to CDOs riddled with unquantifiable risks, yet fail to accommodate a model that has maintained such low delinquency in the UK for over 3 years now, and seems to be repeating that success in Italy.

Maybe one day US regulators will be more receptive.
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