Wells Fargo has told its employees to scale back and eventually cease their participation on for-profit peer-to-peer lending platforms like Lending Club and Prosper. The banking behemoth’s “ethics administrators” cite a conflict of interest, pointing out that peer-to-peer lending is a competitive practice.
The San Francisco Business Times provided the following excerpt from a message sent out to Wells Fargo employees…
Going forward, please refrain from making any new P2P investments/loans. If possible, exit existing investments as soon as practical, without forcing a loss, or when the loans are paid off.
Former Wells Fargo executives and leaders are all over the peer-to-peer lending industry and the wider crowdfunding industry. Former Wells Fargo CEO is one of the primary investors in new P2P lending platform Daric. EarlyShares co-founder and CSO Heather Schwarz-Lopes is also a former Wells Fargo Senior Vice President.
Crowdfunding and peer-to-peer lending is extremely disruptive, and this latest move by Wells Fargo underscores that reality.