Peer-to-peer lending programs were once heralded as a promising way for extending credit, but the initial reports suggest that the model still has a long way to go.

Prosper and Lending Club are several of the largest peer-to-peer sites. In just the last few years, both have witnessed huge huge gains in overall volume. That should underscores their appeal, both for borrowers as well as for lenders. These sites reduce many of the transactional costs involved in lending. Most of the underwriting work is shifted to lenders. The costs of hosting and maintaining sites is not de minimis, but nonetheless, it is hardly anything when compared to costs of maintaining a branch location.

One problem is that the Prosper loans are not performing. A report in 2010 said that almost 23 percent of Prosper (more…)

President Obama’s new mandate that all recipients of government checks could be a game changer in the prepaid market. The policy, which makes all recipients of repeat government payments required to accept their payments through direct deposit, should put more Treasury-designed Direct Express cards in the pockets of Americans.

The new rule makes a lot of sense. The motive for this policy, reported by ABC on June (more…)

H&R Block’s Q4 Earnings Call is interesting, not just to someone who follows tax preparation, but what the changes at this company tell us about the nature of our larger economy.

Although many would agree with Woodrow Wilson that ‘what’s good for GM is good for the country, and vice versa,” it could also be said that whatever ills plague working people are sure to have an impact on H&R Block. Block is the nation’s largest tax preparer. They file one in every seven returns in the United States.

While they do have a broader range of services than some of the other chains, they still depend upon basic 1040A (more…)

An issue is emerging in the Motor City: can General Motors wean itself off of subprime financing? The classic GM customer was a credit guzzler. How many GMs were purchased in the last decade on the heels of a cash-out refinance? That won’t work any more. GM’s credit rating has fallen way below investment grade, and there’s little thirst for a chance to drink from a firehouse of sub-prime asset-backed securities.

Someone else has got to be the one saying “approve, approve, approve.”

Woodrow Wilson once said “what’s good for GM is good for the country, and vice versa.” Maybe the unsaid rejoinder (more…)

The recession, coupled with its supporting burst of the housing bubble, is prompting a re-evaluation of the role for rental housing. Knowing that it is time to rethink assumptions about home-ownership and rental housing is easy. It gets harder when people ask what should be done. That is because there is no clear agreement on rental demand.

Let’s start with a fact: rents increased this quarter, for the first time since 2008. That should tell us that things are getting better.  However, it gets more complicated when people try to read into the messages underneath the numbers.

Why Rental Housing Is About to Boom

Some would conclude that the foreclosure crisis will put more families into the market for rentals. Call it the Transformation Hypothesis. Homeowners are being transformed into renters. Fannie Mae is foreclosing on tens of thousands of mortgages every day. Certainly, says the reasoning of some, this would mean more renters.That view is (more…)