Legal Content Review

This week saw the submission of a number of articles in Associated Content’s legal genre.  Below you will find a sampling of the various submissions with links to each piece. Make sure to stop by and read the entire text of the article and also to look at the other excellent submissions of the past week. 

Peer to Peer Lending – The Next Big dot.com Boom? by JR Miller -
JR Miller peels away the layers off a new internet movement that he correctly identifies as something that holds the potential to be a hot button issue in the peer-to-peer movement.  By way of background, Miller sets up the peer-to-peer music and video sharing that was the focus of a attention in recent years.  With this background, Miller goes on to discuss peer-to-peer financial loans.  Apparently some internet sites have started connecting users for the purpose of making loans.  The problem with this is such sharing allows for the notions of traditional banking to be bypassed.  According to the Miller, most of the borrowers on the site have poor credit that would cause problems at a traditional financial institution.  Lenders on the other hand make their loans at higher interest rates as the tradeoff for making loans to borrowers with poorer credit. 




The article goes on to point out that lenders on the site sometimes charge up to 35% interest and, perhaps most surprisingly, if a borrower defaults, the lender doesn’t come after them, the web site has a collection agency component that pursues the borrower for payment.  Miller does an excellent job of explaining how the process operates as well as posing and discussing the question that the concept begs –how will the banking industry react?  Overall, the article does a great job of not only detailing the process, but letting people know that peer-to-peer networks will likely be something that we will continue to hear about for years to come.