Zopa, the much-celebrated UK-based peer-to-peer consumer lending site, is effectively shutting operations in the U.S.
According to remarks buried within the American Zopa site, the company's global CEO Doug Dolton said that all Zopa U.S. users will be dealing directly with the company's credit union partners from now on.
Loans and CDs will retain the same rates and terms. However, rather than conducting business P2P-style within the Zopa online community site, customers will instead work with the credit unions. "Remember, Zopa loans and CDs were issued by our credit unions partners in the first place after all," Dolton noted in his blog.
Zopa is gradually migrating its members to the credit unions, starting with Affinity Plus CU members. Existing Zopa customers will still be able to log into their accounts, make extra payments and contact Zopa for customer service issues until the time they are assigned to their credit union. Those wishing to open a new account, whether as a borrower or an investor, will be taken to the website of one of Zopa's credit union partners.
Dolton defends the move saying in his blog, "because credit unions are not caught up in the financial meltdown on Wall Street like the big banks, they are still making plenty of loans at great rates." He also clarifies a statement by a colleague. "One of our colleagues in the U.K. mistakenly said that our credit union partners had 'pretty much stopped making loans'—that is not the case at all. In fact, our credit union partners made more loans through Zopa last month than the month before."
When Zopa launched in the U.S., it was unable to operate as the pure P2P play as it does in the U.K. and elsewhere. Therefore, it needed to partner with the credit unions for regulatory reasons. According to another Zopa blog post, its operations in the U.S. were being adversely impacted in a way that the company simply could not predict when it opened its virtual doors here.
Zopa could not be reached for comment.