As I stated last week, one of the reasons I moved to California was so that I could start a Lending Club IRA account and start lending money in the P2P network. For some reason, Washington, D.C. decided to be unreasonable and have not approved social lending for its citizens.
It’s my strong opinion that I should be allowed to invest my money the way I want to, so I hated that people in other states had an additional fantastic investment vehicle and that my investment choices were limited.
P2P Lending Requirements
For those wondering, only residents from the following states may invest with Lending Club:
CA, CO, CT, DE, FL, GA, HI, ID, IL, KY, LA, ME, MN, MO, MS, MT, NH, NV, NY, RI, SC, SD, UT, VA, WA, WI, WV, and WY.
Just 28 out of 51 (including DC) states. Kind of ridiculous if you ask me, I haven’t heard a good argument for NOT allowing peer to peer lending, but during a recent Yakezie Tweetchat that I hosted, we got some nice feedback, and it turns out there are some (still weak) explanations for why certain states don’t allow social lending.
I tried looking into other ways to enjoy P2P lending while living in D.C. and I thought I could try Lending Club’s Note Trading Platform (where you are allowed to buy already existing notes) yet again, there was a roadblock.
The restrictions on investing using Lending Club’s FOLIOfn note trading platform are far fewer and offers hope to many people who would not otherwise qualify.
Only people living in the District of Columbia, Kansas, Maryland, Ohio, Oregon, and Vermont are not eligible to become trading members with FOLIOfn. That’s a nice improvement to 45 out of 51 eligible states, but it still didn’t help my specific situation, so I just had to wait it out until moving to the
Best Coast West Coast.
P2P Borrowing Requirements
I got curious to what requirements there were to borrow money (in my mind, it’s pretty hard not to allow people to seek out the lowest interest rates they could get, but sure enough, some states have done it), and while there are specific requirements such as minimum credit scores (660 for Lending Club), and a certain credit history, only 8 states don’t allow P2P borrowing yet, and they are Iowa, Idaho, Indiana, Maine, Mississippi, North Dakota, Nebraska, and Tennessee. It’s wonderful that D.C. residents aren’t exlcuded from this
Readers, Do you use Lending Club or another peer to peer lending program? If your state doesn’t allow it, would you if you could?