Linked Finance - Peer to Peer Lending

Leo

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they continue to rely on very poor security for the loans advanced, and their autobid system is near dangerous for those who don't really understand the risks associated to lending to businesses.
Agreed. I contacted them after the conservative auto-bid settings I had in place resulted in a bid on a company that purported to be in business for decades yet a quick director check showed a stream of company dissolutions and subsequent formations every couple of years with variations on the name. Most loans are filling via auto-bids at the moment, so I've started withdrawing the small money I have there.
 

MrEarl

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Agreed. I contacted them after the conservative auto-bid settings I had in place resulted in a bid on a company that purported to be in business for decades yet a quick director check showed a stream of company dissolutions and subsequent formations every couple of years with variations on the name. Most loans are filling via auto-bids at the moment, so I've started withdrawing the small money I have there.
Like you, I've begun to reduce my funds with Linked Finance and expect that I'll continue to do until all funds are out, unless things improve quickly.

Watch out for the charges btw, if you withdraw more than four times a year ;)
 
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MrEarl

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Hello,

I see that LF are now offering 5 year loans.

This makes me even more concerned, given:
  1. How poor their arrears collection appears to be,
  2. Their due diligence on borrowers has previously been,
  3. The absence of any kind of tangible security for the loans.

Let the Buyer Beware isn't good enough here, and yet, the Central Bank is no where to be seen!!!


.
 
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RedOnion

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. Yet, the Central Bank, is no where to be seen!!!
Unfortunately, not much CBI can do as the sector is currently completely unregulated here. They did issue a warning back in June 2014 which called out a lot of the concerns you have.
There was talk about bringing in legislation to regulate, but there's also EU level legislation being drafted, so nothing will happen fast. The dept of finance did publish a consultation paper last year, which again echoed what you're saying.
 

MrEarl

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Hello,

So our CB maneged to issue a warning six years ago, but have since done little more. That's shocking, when we talk about protecting consumers etc.
 

RedOnion

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I agree, but there's nothing they can do. There's no legislation, so the CB would be 'sticking their nose in' if they did anything else. They have absolutely no powers to look at individual providers without legislation, unless that provider also performs regulated functions.

For clarity, my comments are in relation to the entire crowdfunding sector, and not any individual platform.
 

MrEarl

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Hello,

While I appreciate the point that you are making, the Central Bank, the ECB and the Irish Government (through the Dept of Finance etc), all engage regularly.

If they had a desire to do something, it could have been done a long time ago.
 

MrEarl

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Looks like Linked Finance are giving out payment holidays to anyone asking for one...

I've yet to see any mention of them agreeing part payments with any borrowers that I've lent to, and suspect that I never will.

I would also love to know how they are assessing borrowers for their new coronavirus loans, as I fear they may not be correctly assessed, or priced, for the true level of risk associated with them etc.

How Linked Finance manage the current situation with Borrowers, will go a long way towards determining their own future.
 
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NoRegretsCoyote

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Hello,

While I appreciate the point that you are making, the Central Bank, the ECB and the Irish Government (through the Dept of Finance etc), all engage regularly.

If they had a desire to do something, it could have been done a long time ago.
This will be regulated eventually at EU level, and Irish legislation and supervisors will be implementing EU requirements, with some flexibility.

There is no point in Irish legislators acting too early, as they will inevitably have to adjust in due course. John Gormley tried to ban incandescent lightbulbs in 2008 in Ireland six months before they were going to be basically banned EU-wide, at which point Ireland would have to get in line. He eventually dropped the plan.

Back on topic, EU Commission said it was going to have a proposal for a Regulation for crowdfunding in October 2018 but nothing much since, I am not sure why.
 

MrEarl

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Hello,

While not wanting to be rude, I am not going to accept that, sorry.

Linked Finance launched in early 2013. They later obtained UK Regulatory approval in early 2017, with lots of publicity about the fact that there was no option to get regulated by the Irish Central Bank.

Other crowd funding operations launched around the same time, or not long after Linked Finance.

It's now April 2020, seven years since Linked Finance launched and there is still no regulation for crowdfunding, here in Ireland. That's simply inexcusable and the Central Bank should not be let off the hook, for failing to regulate companies who are promoting "investments" to Irish consumers.

The UK Regulator managed to figure out how to put some regulations in place quite quickly, so in the absence of asking our lads to do some work, could they not even have managed a bit of the old "copy and paste"? The UK and Ireland does share the same language, so surely it wasn't that big a job for the lads at the CBI?

Once again, the Central Bank is failing to provide appropriate regulation and long term, its the members of the public who will pay the price for this.

So, what will happen then, no doubt the CBI will attempt to make excuses and try to deflect, while an ex senior CBI staff member goes around telling everyone how he / she had warned against this blah blah blah. Who knows that might even write a little book on it :(
 
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Brendan Burgess

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It's now April 2020, seven years since Linked Finance launched and there is still no regulation for crowdfunding, here in Ireland. That's simply inexcusable and the Central Bank should not be let off the hook, for failing to regulate companies who are promoting "investments" to Irish consumers.
Hi Mr Earl

And should the Central Bank take responsibility for the poor behaviour of the companies which sold overseas property in Ireland?

And should they take responsibility for the losses I have made betting with Paddy Power?

If you think that the Central Bank should regulate these, then lobby the politicians.

The Central Bank can't choose what it wants to regulate. The politicians you elected make those choices.

Brendan
 

MrEarl

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Hi Mr Earl

And should the Central Bank take responsibility for the poor behaviour of the companies which sold overseas property in Ireland?

And should they take responsibility for the losses I have made betting with Paddy Power?

If you think that the Central Bank should regulate these, then lobby the politicians.

The Central Bank can't choose what it wants to regulate. The politicians you elected make those choices.

Brendan
Hello,

In short Mr Burgess, the regulator should be regulating the sale of anything that falls under the category of financial services being offered to Irish consumers, in my view.

Does that include the sale of foreign sale and leasebacks, maybe?

Does that include regulating gambling, absolutely not. That's not to say that halving shouldn't be regulated, or that Paddy Power might not need to be approved for provision of payment services or its debit card, perhaps.

As for contracting the CBI and our politicans, I have done and more than once, dating back a number of years. Unfortunitely, they just brushed me off with a little lip service, and a few carefully worded excuses.
 

Brendan Burgess

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In short Mr Burgess, the regulator should be regulating the sale of anything that falls under the category of financial services being offered to Irish consumers, in my view.
What you think that the Central Bank should be doing and what they are permitted and obliged to do by law are two different things.

We can argue whether or not peer to peer lending should be regulated.

But you should not criticise the Central Bank for failing to do a job which they have no authority to do.

Brendan
 

MrEarl

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What you think that the Central Bank should be doing and what they are permitted and obliged to do by law are two different things.

We can argue whether or not peer to peer lending should be regulated.

But you should not criticise the Central Bank for failing to do a job which they have no authority to do.

Brendan
Oh come on Mr Burgess, please don't tell me that you think it's that clear cut, that the CBI doesn't have any obligation to be pro-active, to be watching for potential risks to consumers and pushing for whatever relevant instruction is needed from the Dept of Finance etc.

When we entrust regulation on a third party, we expect them to be pro-active, not just give us a verse of monkey say, monkey do, don't we? I know I certainly do.
 

Brendan Burgess

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I expect the Central Bank to act within their powers and not outside their powers.

However, if they see some shadow banking that they are concerned about, I would expect them to raise these issues with the Department of Finance, but that is all that they can do.

Brendan
 

NoRegretsCoyote

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@MrEarl

You don't understand how this works:

  1. Government proposes legislation;
  2. Oireachtas votes on it;
  3. Central Bank implements it.

In the absence of the first two steps the Central Bank can do very little.
 

SBarrett

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Mr Earl

if you are not happy with Linked Finance not being regulated, why do you lend through it?

And Brendan and Coyote are correct re regulated. The CBI has very little power in this country. It is up to the politicians to write the legislation.

Steven
www.bluewaterfp.ie
 

MrEarl

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Mr Earl

if you are not happy with Linked Finance not being regulated, why do you lend through it?
I'm not still lending through them, I stopped quite some time ago, but it takes a long time to get your money back out, once it's been lent.
 
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