1. Zopa, LendingClub and Prosper are all subject to the same regulations in US. The primary regulator is the SEC and the governing regulations are securities. This reflects the apparent fact that online display of a loan request for purposes of investing in that loan request, is a security.

2. LendingClub filed an S-1 in June, and re-opened October following SEC approval. Prosper went ‘quiet’ in October, accepting no more lenders, pending S-1 filing and approval. Note that the LendingClub approval contains conditions that restricts lenders to those who are financial savvy, and capabale of sustaining losses.

3. Prosper altered their policy Feb 2007, and elminated low credit scores, below 550 +/-. Their earlier policy of accepting any borrower notwithstanding their score was unworkable – ie there is a point where the certainty of loss is so high, that no interest rate can ever compensate for the risk.

End of facts – rest is my view:

3. Disintermediation: social lending eliminates the traditional middleman so qualifies on that alone. It further qualifies based on the fact that the social lender is passive in the transaction, serving only the platform to enable the transaction.

disclosure: I am active with CommunityLend, a Canadian social lender who is seeking regulatory approval prior to launching.