Wells Fargo bars employees from making personal loans on peer-to-peer sites

[Jesus Malverde]

Wells Fargo is barring employees from investing in loans made by Lending Club, Prosper Marketplace and other peer-to-peer lenders, citing potential conflicts of interest.

Wells Fargo's "ethics administrators" have decided "that for-profit peer-to-peer lending is a competitive activity that poses a conflict of interest," the Financial Times reported, based on a message to the bank's employees with accounts at peer-to-peer lenders.

"Going forward, please refrain from making any new P2P investments/loans," according to the bank's message. "If possible, exit existing investments as soon as practical, without forcing a loss, or when the loans are paid off."

Wells said Tuesday that the guidance was in response to a "specific question about investments in peer-to-peer lending companies from a small group of team members" in one of the bank's units.

Since opening their doors, Lending Club has facilitated more than $3 billion in loans to very creditworthy borrowers, while Prosper has made almost $700 million in loans. Both are based in San Francisco.

The lending platforms can offer loans at lower rates than banks charge, while offering lenders, or more accurately, investors, higher rates.

http://www.bizjournals.com/sanfrancisco/blog/2014/01/wells-fargo-bank-lending-club-prosper.html?ana=e_du_pub&s=article_du&ed=2014-01-21

[BlueStreak]

1. How is that any different from saying employees can't buy whole life policies

from other companies? Those funds can end up as loans that compete with Wells Fargo's business.

[Jesus Malverde]

2. It's the business model of peer to peer not corporate to consumer...

Thats my guess..

[BlueStreak]

3. Here's the solution

Employees who want to do this can create a fake corporation with bank accounts in the Cayman Islands. And that fake corporation can make the loans. Surely there would be no objection to that ... because it is so corporate.

(sarcasm)

The only legitimate position I think Wells has is if the employees are diverting specific Wells customers and offering to make loans directly to them. Other than that one case, it is none of Wells' business what their employees do with their own money on their own time.