As reported in my previous blog post, Prosper has somehow teamed up (and I use this characterization loosely) with WebBank to issue loans on Prosper. Primary benefit that I can see is the universal lending rates that can be obtained from a national organization as opposed to the state-by-state patchwork that Prosper engineered by itself.
Someone made an off-hand comment that LendingClub also partners with WebBank, so I thought I'd do a quick Internet search and see what I can unearth about WebBank. Also I was intrigued by the description of WebBank in the Prosper blurb as an "Industrial Bank."
First stop was Wikipedia: "A financial institition that lends money and may be owned by non-financial institutions." It's not a long entry, read it. It's interesting.
That led me onwards to the WebBank website (link above) and their "About Us" page. From there follow the link to "Overview of WebBank Partnerships." This reveals that WebBank is a subsidiary of WebFinancial Corporation (WEFN.PK). From WebFinancial's website, we learn that WebBank offers this service:
FEE FOR SERVICE LENDING. This is a form of unsecured consumer lending that operates under an arrangement between WebBank and a third party. A third party company is engaged to source these loans. The loan is underwritten to WebBank's credit standards and is funded by WebBank. The third party purchases each loan shortly after origination.That, obviously is the service that Prosper is contracting for.
There's much in the linked material that may be of interest to those that sleuth away in company information and takes delight in looking at majority stockholders, director affiliations, date of filings, financial results and insider trades.
The one interesting tidbit for me is that they're located at 590 Madison Square, once the IBM flagship building in New York City.