Peer-to-peer lending site Prosper.com has stopped letting high-risk borrowers use its site because too many of them failed to repay their loans. The site's problem, says columnist and one-time lender Alex Salkever, is that Prosper got in the way of letting a social bond form between microborrower and microlender.
Between now and 2014, a wave of commercial real estate loan failures threatens to swamp the nation's already weak financial system. The Congressional Oversight Panel warned this week that the potential defaults could push thousands of smaller banks into failure.
Big national banks get the attention, but it turns out that small banks are more interested in snapping up failed former rivals than their larger competitors. Some 46% of small banks say they're keen on bidding for failed banks' assets, compared with just 36% of large banks.
As part of an effort to redirect TARP funds from Wall Street to Main Street, the Treasury Department Wednesday announced a program that will help local financial institutions get more loans out to people and businesses in the communities hardest hit by the recession.
President Obama's budget plan for 2011 includes about $100 billion in spending to address unemployment and economic weakness. Obama will also seek a bipartisan commission to focus on reducing the national debt in the long run.
