Financial Start-ups Form `Coalition for New Credit Models`

With Washington Knee-Deep in Financial Services Regulatory Reform, Coalition to
Advocate for Smart, Holistic Policies
WASHINGTON--(Business Wire)--
Amid historic regulatory reforms being considered by the new administration and
lawmakers on Capitol Hill, the Coalition for New Credit Models announced its
formal launch today as its representatives descended upon Washington. The
Coalition is made up of non-profit, for-profit, and social enterprises using new
technologies, products and business models to provide credit and information to
millions of consumers and small and midsized businesses. These models serve as
innovative alternatives to existing banking and financial institutions and are
backed by venture and social capital to stimulate the economy, shore up
financial markets, and enhance local communities. They have a special focus on
bringing transparency, fairness, durability, and accountability to consumers and
to our credit markets.

Chris Larsen, Chief Executive Officer and Co-founder of Prosper.com, America`s
largest peer-to-peer lending marketplace,said,"This country has been in an
energy crisis for years and we are now in a financial crisis. America`s economic
future depends on new and alternative credit models being embraced in the same
way green technologies are being nurtured by policy leaders to help solve the
energy crisis. We are at risk of being suffocated by rigid regulations that
threaten rather than embrace new technologies and models."

The current regulatory environment has stifled many entrepreneurs in this
nascent industry, and it is clearly time for new policies and fresh thinking
from lawmakers and regulators. At a time when the credit crisis and recession
have adversely affected consumers, families, small and mid-market businesses,
Coalition members have created alternatives and innovations that will make the
country less dependent on any single point of failure, or institutions that are
too big or too interconnected to fail.

James Gutierrez, Chief Executive Officer of Progreso Financiero, said, "Over 100
million Americans are underbanked and in dire need of options and innovation
from new companies that are focused on the basics of sound lending and good,
fair consumer policies. Without new innovators providing better options,
millions of Americans will be left out, far away from the American Dream and
stuck with predatory choices, simply because they lack a credit score and
established credit history. We believe government can do more to provide greater
access and financial inclusion to all consumers, especially the underbanked, and
help cultivate new models that do so on responsible terms."

Nicolas Perkin, Chief Executive Officer and Co-Founderof The Receivables
Exchange, said, "Now more than ever, America`s businesses should have unfettered
access to alternative and reliable sources of capital to meet their business
financing needs. As the economy regains momentum and technology continues to
accelerate the pace at which business is conducted around the world, only
innovation and an uncompromised focus on transparency and responsible financing
models will drive sustainable growth and prevent businesses from being reliant
on a single source of funding, and thereby exposed to unnecessary risk."

The Coalition for New Credit Models recommends that Congress and the
Administration:

1
Adopt legislation classifying person-to-person lending as a consumer
banking service, not a securities offering.
2
Create a liquidity fund to provide capital for companies making small
consumer loans to underbanked individuals.
3
Establish a federal backstop for small and mid-sized businesses to
provide access to working capital through electronic marketplaces.
4
Enable the emergence of a robust U.S.-based private company stock
market to provide the exit path necessary to attract investment
capital back to this country, bolstering domestic small businesses,
innovation and job growth.
5
Create a Start Up Liaison at Treasury Department or within banking
regulators to guide and fast-track the development of new financial
products by start-up companies and organizations seeking to innovate
the way consumers and businesses raise and access capital.

Background on Coalition Members:

* Credit Karma (San Francisco, CA) is the consumer`s advocate for demystifying
credit, is the only Web site that provides consumers free access to their credit
score, and has a range of tools and information resources to help them monitor
and manage the credit aspect of their financial health. Credit Karma`s goal is
to help consumers easily digest the contents of their credit report and
understand what makes up their credit score. Credit Karma works with a range of
partners, including mortgage lenders, credit card providers, banks, and wireless
providers.
* Loanio, Inc. (Nanuet, NY) is an Internet-based peer-to-peer lending platform
where individuals can request personal loans that are funded by other individual
(or corporate) investors. Interest rates on loans are set by auction, where
lenders/investors bid on loan requests that they find attractive. Through patent
pending features such as Platinum Verification and Co-borrowing, Loanio`s goal
is to provide access to a significantly underserved borrower market and stronger
security for its lenders/investors. Loanio, Inc. suspended its business
activities in November 2008 and is currently registering its securities with the
SEC.
* ProFounder(Palo Alto, CA) is a platform where entrepreneurs raise seed funding
from their social network and affiliates through a legally compliant and dynamic
process; and individuals invest small amounts of money in companies in exchange
for ownership. ProFounder is co-founded by Jessica Jackley, Evan Reas, and Dana
Mauriello. Jackley is Co-Founder and former Chief Marketing Officer of Kiva.org,
the world's first peer-to-peer microloan website which has made almost $100M in
loans since its inception at the end of 2005.
* Progreso Financiero(Mountain View, CA) is the leading provider of consumer
friendly loans to underbanked Hispanic families in America. Progreso has
developed a proprietary credit score based on over 25,000 initial loans, and in
turn, can lend money at fair rates and lower losses to families who lack FICO
scores and traditional banking relationships. Progreso's mission is to help its
customers build a credit history and fully realize the American Dream, and to
provide ground floor innovation that helps move the underbanked up the financial
services ladder. With over 100 employees and $26 million in venture capital,
Progreso is rapidly expanding throughout the Southwest, and aims to serve over 1
million underbanked families with credit, debit, savings and other mainstream
products by 2012.
* Prosper (San Francisco, CA) is America`s largest peer-to-peer lending
marketplace. Since its launch in February 2006, over 850,000 Americans have
joined the community and $180 million in loans have been facilitated. Prosper is
an auction-based platform, where borrowers set the maximum rate they`re willing
to pay, and individual and institution investors bid at or below the rate set by
the borrower. In October 2008, Prosper halted its marketplace and entered a
quiet period as part of the process of registering with the SEC. Nine months
later, in July 2009, Prosper`s registration statement with the SEC was declared
effective. Notes offered by Prospectus.
* The Receivables Exchange (New Orleans, LA) is a real-time, online competitive
marketplace for accounts receivable that gives small and medium-sized businesses
the ability to generate cash flow quickly and as competitively as possible. The
Receivables Exchange allows businesses to sell their receivables to a global
network of institutional investors and access working capital in as little as 24
hours. When you consider the typical remittance term of 48 days, or as much as
180 days, The Receivables Exchange is a welcome financial tool for small and
mid-sized businesses.
* SecondMarket(New York, NY) is the largest centralized marketplace for illiquid
assets, including auction-rate securities, bankruptcy claims, collateralized
debt obligations, limited partnership interests, private company stock,
residential and commercial mortgage-backed securities, warrants/restricted
securities in public companies, and whole loans. SecondMarket`s online trading
platform has more than 4,000 participants, including global financial
institutions, hedge funds, private equity firms, mutual funds, corporations and
other institutional and accredited investors that collectively manage over $1
trillion in assets available for investment.

For Coalition for New Credit Models
Tiffany Fox, 415-593-5416 (Press)
tiffany@prosper.com
twitter: @tiffanykfox
or
Podesta Group
Israel Klein, 202-879-9373 (Public Affairs)

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