List of States Eligible to Participate (Lending Club)

[Investar]

Over on Prosper INVESTAR Lenders have been tracking states coming on line at Lending Club. Each state must approve the P2P platform after the Securities and Exchange Commission gives its go-ahead. We believe tracking activity at Lending Club provides a good clue as to how states will line up on Prosper once they emerge from the national 'Quiet'.

Click here for Prosper 50 State Progress - Blue Sky - Lend Trade Borrow

At Lending Club, most states have approved the secondary market where lenders buy or trade existing notes via FOLIOfn. This was an easy call because the platform parallels traditional schemas. Approval of the primary platform where notes (loans) are created is another matter. Until a state approves each area, its residents cannot participate in bidding and funding notes, trade existing notes, or borrowing money.

LIST OF STATES AND ELIGIBILITY TO PARTICIPATE

Last activity: 08/31/09 Missouri is 27th state approved to "Lend"
Last review: 09/04/09

L = Lend - states eligible to bid and fund notes
T = Trade - states where lenders may engage in note trading
B = Borrow - states where borrowers may participate
:: = not eligible, not approved in this state  

L  T  B State                
:: T  B Alabama
:: T  B Alaska
:: T  B Arizona
:: T  B Arkansas
L  T  B California (11/14/08 lending was approved 30 days out w/special restrictions)
L  T  B Colorado (10/14/08 lending was approved pre-launch)
L  T  B Connecticut (10/14/08 lending was approved pre-launch)
L  T  B Delaware (10/14/08 lending approved pre-launch)
:: :: B District of Columbia
L  T  B Florida (10/14/08 lending was approved pre-launch)
L  T  B Georgia (10/14/08 lending was approved pre-launch)
L  T  B Hawaii (10/17/08 lending was approved at launch)
L  T :: Idaho (11/09/08 lending was approved 25 days out)
L  T  B Illinois (10/14/08 lending was approved pre-launch)
:: T :: Indiana
:: T :: Iowa
:: :: :: Kansas
:: :: B Kentucky
L  T  B Louisiana (10/14/08 lending was approved pre-launch)
L  T :: Maine (approved months later on 07/20/09, the same date they approved Prosper)
:: :: B Maryland (**unresponsive as of 02/25/09)
:: T  B Massachusetts
:: T  B Michigan
L  T  B Minnesota (10/14/08 lending approved pre-launch)
L  T :: Mississippi (10/14/08 lending approved pre-launch)
L  T  B Missouri (approved months later on 08/31/09, two weeks after they approved Prosper)
L  T  B Montana (10/14/08 lending was approved pre-launch)
:: T :: Nebraska
L  T  B Nevada (10/17/08 lending was approved at launch)
L  T  B New Hampshire (10/24/08 approved 10 days out)
:: T  B New Jersey (**active review of lending underway 01/05/09)
:: T  B New Mexico
L  T  B New York (10/14/08 lending was approved pre-launch)
:: T :: North Carolina
:: T :: North Dakota
:: :: B Ohio (xx) (**active review of lending underway 01/05/09)
:: T  B Oklahoma
:: :: B Oregon (xx) (**active review of lending underway 12/02/08)
:: T  B Pennsylvania (**active review of lending underway 01/05/09)
L  T  B Rhode Island (10/14/08 lending was approved pre-launch)
L  T  B South Carolina (11/09/08 lending was approved 25 days out)
L  T  B South Dakota (10/14/08 lending was approved pre-launch)
:: T :: Tennessee
:: :: B Texas (**active review of lending underway 01/05/09)
L  T  B Utah (10/17/08 lending approved at launch)
:: :: B Vermont
L  T  B Virginia (12/08/08 lending approved 55 days out)
L  T  B Washington (10/30/08 lending was approved 15 days out)
L  T  B West Virginia (10/14/08 lending was approved pre-launch)
L  T  B Wisconsin (10/14/08 lending was approved pre-launch)
L  T  B Wyoming (10/17/08 lending was approved at launch)

**active review does not mean approval will be forthcoming. It simply indicates there has been activity, the matter is not dormant. **unresponsive indicates silence. Clues are gathered from various sources.


RECAP OF STATES INELIGIBLE TO TRADE
STATE COUNT NOW = < 6+1 >
Last activity: 11/25/08 KANSAS also excluded
Last review: 06/18/09

NOTE TRADING FAQ @ https://www.lendingclub.com/foliofn/faq.action #3 Who can participate?
At this moment, applicants from these states are not eligible to become trading members with FOLIOfn.
- District of Columbia
- Kansas
- Maryland
- Ohio
- Oregon
- Texas
- Vermont


RECAP OF STATES INELIGIBLE TO BORROW
STATE COUNT NOW = 10
Last activity: 10/14/08
Last review: 06/27/10

There are also some prohibitions on the borrowing side. These are unrelated to approval issues on the lending side. Here state banking regulations are involved.

BORROWING FAQ @ http://www.lendingclub.com/kb/index.php?View=entry&EntryID=186 Who is eligible to borrow through Lending Club?
At this time, we are not accepting loan applications from the following:
- Idaho
- Indiana
- Iowa
- Kansas
- Maine
- Mississippi
- Nebraska
- North Carolina
- North Dakota
- Tennessee

[deskguy]

 yes, and that's why i fear when prosper returns a lot of us are going to be shut out of doing business. anyone in maryland, for instance, and 24 other states. i read lendingclub's list of approved states a couple of times a week and have seen no changes in weeks. at least i'm still getting paid on the loans i did make.

 deskguy

[go4reward]

Investar,

That is a very impressive list you posted. Too bad not too many states are eligible yet.

Ken

[Investar]

... Too bad not too many states are eligible yet.
Ken

On the plus side, they had 15 states on board right out of the gate and that grew to half the 50 states in sixty days. I know this is small consolation regards Maryland who appears totally unconvinced (no lending, period). There's been a lull in the action lately, perhaps the holidays interfered. I have contacted Lending Club asking for any hints about the future of the uncommitted states.

[Investar]

Update
WORK IN PROGRESS
State regulators are actively reviewing LendingClub's primary P2P lending program in:
   • New Jersey
   • Ohio
   • Pennsylvania
   • Texas

Without transmitting "information intended only for the person to whom it was addressed because it may contain confidential and/or privileged material," let me just say that I emailed a certain someone very close to the heart of the matter asking: "Without infringing on Blue Sky protocol, is it possible to post a blog entry that hints at progress in 'off-line' states? Any proof there is progress behind the scenes would certainly encourage lenders like me who are anticipatory, but growing weary in the void out here!"

And I received a reply....

Dear (omit name),
Thank you for your inquiry and please pardon me for the delay in responding. Our ability to publicly comment on pending registrations is very limited. I can certainly tell you that PA, TX, NJ and OH are at the top of the list of states we are pursuing, based on population and market size, and that we do have on-going discussions with the regulators in these 4 states.
Hope this helps. 
Best,
(omit name)

[Investar]

More about Maryland

Over in another thread Deskguy gives a heads-up to Prosper lenders from Maryland who might have been wondering....

"i emailed lendingclub.com asking if maryland had specifically rejected its application for registration or simply hadn't taken any action at all. a lady called a few minutes ago to assure me that maryland has just not done anything with its application and that she will notify me when maryland gets approved."

Here are the contacts I have for securities regulators in Maryland. Not a lot on-line. Looks like a polite call or an email is your path to discovery. Maybe a little prod from Maryland lenders will shuffle LendingClub's papers higher up in the stack.

Maryland Atty General's homepage
http://www.oag.state.md.us/

inside the Atty General's website
http://www.oag.state.md.us/Securities/

via North American Securities Administrators Association
http://www.nasaa.org/QuickLinks/ContactYourRegulator.cfm?state=md#contactinfo

[Investar]

Well-zer, it's Tuesday again and I have reviewed the 50-states chart. With this update we mark a full month with no change in any lender's status. There's a litany of speculation as to why this is. We just went thru the holidays which can't have helped. We have entered the season where we replace top bureaucrats all across the country in the wake of last fall's election. Bureaucracies tend to trundle on but the bi-annual upheaval at their head is known to stymy precedent-setting activity in the interim. Lending Club's request is untypical, a bit of a precedent.

Then of course, 2008's economic upheaval has lead (sometimes forced) major financial institutions, brokerage houses and investment companies to file reams of 'Blue Sky' requests as they consolidate investment venues, re-characterize status, and do all kinds of other things that require rubber-stamping in the 50 states. This backlog has surely pushed the 'small fry' like Lending Club farther down on their to-do lists.

Those are the easy excuses for delay. Deskguy talks about something more insidious over on this thread....
http://forums.go4reward.com/index.php?topic=109.msg1163#msg1163

He fears excessive protectionism has overtaken his 'blue state'. Red and blue alike, some have surely turned yellow following the battering consumers of every sort took in 2008. In the wake of billion-dollar antics like those Bernard Madoff pulled off under their noses, they're all a little gun-shy. Scrutiny swings from laissez-faire to apprehension. Certainly peer-to-peer lending is a tougher sell in the prickish states now than it would have been in say, 2007.

[Investar]

Tuesday morning's chore is done .. .. edit/update the States list to reflect....
Last activity: 12/08/08 add Virginia
Last review: 01/26/09

In other words, nothing new here. As a lender in a state that hasn't approved the primary platform (bidding and funding), my 'quiet' patience and positive outlook are beginning to falter. I expect others who check this thread regularly are standing in line at the regulatory gates with me. Stiff upper lip, folks...! But I think a little pacing back and forth is okay at this point.
 
   

[deskguy]

i also check regularly but i wonder why i bother. i suspect that the half of the states that did not approve in the initial spasm are not a good bet to do it at all. i am not optimistic that prosper and loanio will fare any differently.

on another note, my list of lates on prosper has increased by three in the past week. i now have 10 lates out of 148 active loans, or slightly less than 7 pct. one of them is three months late and never made a payment. how long does it take prosper to collect? sadly, a lot of the 10 lates are rated A and AA and many of them were chosen by computer, not by me. if prosper ever gets back into action i am going to do all the picking myself.

for those of you relying on the data on lendingstats.com, i suggest you be wary. it still credits me with 155 loans but three of those were approved in a hurry the last night of business and canceled the next day. i suspect the lawyers were responsible for that. lendingstats also says i have six late loans, a number that is nearly two months old.

 deskguy

[Investar]

for those of you relying on the data on lendingstats.com, i suggest you be wary. it still credits me with 155 loans but three of those were approved in a hurry the last night of business and canceled the next day. i suspect the lawyers were responsible for that. lendingstats also says i have six late loans, a number that is nearly two months old. deskguy

Date stamp at the bottom of page shows "Prosper data as of" today but that's erroneous. He only pulls fresh stats over once a week, usually on the weekend, I've noticed. New lates don't show until the following week. See what's up next week.

edit to add my data seems to match between LS and Eric's. Your difference could be daily pull vs weekly pull. Note that LendingStats shows all loans in total count including paid. In your roster he shows the three you spoke of as cancelled.

[Investar]

I dutifully posted a new date stamp on the List of States this morning (as I've been doing weekly). Again this week, no change of status is reported. It's becoming clear the steady trickle of approval LendingClub was enjoying has dried up, ground to a halt. My state remains "secondary market" only. I am not enthused. This exercise is designed to predict which states will approve Prosper's primary platform in due course. Concluding it will be only half of 'em is truly disappointing. Hope something breaks loose soon!

[Investar]

Here we are, the first week of March. Still no breaking news although two states do get a status update:
Oregon adds **active review 12/02/08
Maryland is noted **unresponsive 02/25/09

In an article related to the NASAA disagreement with Prosper, Kevin Anselm, chief of enforcement with the Oregon Division of Finance and Corporate Securities told The Oregonian they were "currently reviewing a registration request by Sunnyvale, California-based LendingClub." So they are looking at it.

The other tidbit comes via Deskguy. Maryland state authorities were unresponsive to his query but an authorized spokeswoman at LendingClub told him Maryland has not rejected their registration request. Maryland simply has not responded.

[go4reward]

Maryland is noted **unresponsive 02/25/09

I wonder if Maryland just ignore the issues or still in the queue.

[Investar]

Thanks to a heads-up from 'deskguy' we learned that Maine finally approved LendingClub in late July — the same week they approved the 'new' Prosper. Usually Renaud Laplanche, their CEO makes the announcement. He must be on vacation:

WELCOME MAINE INVESTORS
by Sam Kasle, Director, Investor Marketing at Lending Club
Monday, July 20th, 2009

I am pleased to announce that our securities filing has been cleared by the great state of Maine. So, whichever of the 16 counties of our state (whether it's Cumberland or Franklin) you call home, now you can put your cash to work with Lending Club....

[Investar]

Once again thanks again to Prosper's lead, two weeks later their competition piggy-backed with....

Lending Club Welcomes Missouri Investors!
by Rob Garcia
August 31, 2009

We are pleased to announce that our securities filing has been cleared by the state of Missouri, giving Missourians the opportunity to invest in Lending Club notes starting today...