Peer-to-peer Loanio is following the same path as competitors Prosper and Lending club by temporarily halting new loans in order to register promissory notes with the securities authorities.
The registration activity is one U.S. online peer-to-peer lenders take in order to set up secondary markets for the issued loans. Lending Club recently emerged this fall from a quiet period for its registration, and Prosper made its move in October – which is when Loanio launched its service targeting subprime borrowers who have been increasingly frozen out of the risk-averse bank credit scene. Existing loans at Loanio will continue to be serviced.
As posted on Loanio’s site: “Loanio, Inc. has suspended its business activities so that we may begin the process of registering our promissory notes with the appropriate securities authorities. Please be advised that effective immediately, Loanio will no longer be accepting registration from lenders or borrowers or accepting new loan requests until further notice.”