A while back, we presented an article indicating that Wells Fargo was banning its employees from participating in the P2P (peer-to-peer) lending marketplace. Now it appears that Wells Fargo has reversed its position and will no longer prohibit employees from offering loans in the P2P market. Is this something that you, yourself should consider?
Wells Fargo reversed its employee ban on investing money in peer-to-peer lending sites like Lending Club and Prosper.
The San Francisco bank imposed the ban via an internal email in January that garnered international media coverage. Some saw the bank’s ban as a sign that P2P lending had matured to the point that one of the nation’s largest banks viewed it as a competitive threat. The bank’s ban was also puzzling since employees presumably can invest directly in corporate bonds and money market mutual funds, which long ago became popular channels for big banks’ largest clients to raise cash.
Back in January, Wells Fargo told employees that P2P services raised conflicts of interest since they compete against the bank’s (NYSE: WFC) main business of lending money. Some of these lending platforms are also likely clients of Wells Fargo.
But this week, the bank, under the leadership of Chairman and CEO John Stumpf, said its earlier edict was based on the premise of investing in the P2P lenders themselves, not the loans made over their platforms.
“The original guidance given to team members was based on investing in the equity of a P2P lending company,” Wells Fargo spokesman Ruben Pulido said Tuesday. “After conducting a careful review of the current P2P market, we do not view our team members making P2P debt security investments as inconsistent with our code of ethics.
“The P2P market is not uniform, and is evolving and expanding rapidly,” Pulido said. “We will continue to review our guidance as the market evolves.”