Zopa to Close U.S. Operation

Zopa's U.S. social deposit/lending site will be shuttered, just 10 months after its launch The site, which delivered loan applications and CD customers to six credit union partners, apparently was closed by Zopa. At this point the exact reason is unclear, Zopa blamed the U.S. credit situation and said it wanted to concentrate its efforts in other markets.  Live long and Prosper...

This from Zopa's Blog:

You probably know that Zopa’s US operation has a very different model to that in the UK and Italy in that it works in partnership with financial institutions (the credit unions) rather than being a pure peer to peer marketplace as it is here and in Italy.

So while our model is doing very well in current market conditions, the US has been adversely affected in a way that just couldn’t have been predicted when we launched int he US and is no way the fault of our partners. For us, a real shame is that we weren’t able to launch the original model over there for regulatory reasons.

So, sadly, our US colleagues have decided to withdraw from the US marketplace. This decision will have no impact on Zopa’s other activities in the UK, Italy and Asia.

Zopa’s UK operation has experienced significant volume increases in 2008 with huge growth in new members and increasing lender returns, while continuing to maintain excellent credit quality – currently less than 0.5% of loans are affected by any kind of late payment issue, with actual losses below 0.04%.
Zopa Italy has also achieved the highest growth of any European peer-to-peer operation since its launch in January, and has recently launched the first secondary market for any peer-to-peer operation.

Zopa’s US customers’ deposit accounts continue to be insured by the NCUA up to $250,000, and servicing of those accounts as well as the loans will be assumed by the credit unions within 90 days.

Zopa looks forward to continuing to develop and expand its operation worldwide as it continues to offer investors a safe return on their investments and a better deal for borrowers, and remains optimistic that it can return to the US market when conditions permit.

We’d like to thank our US colleagues for their hard work, dedication and the oustanding service they have provided for their customers. I’m sure you’ll join us in wishing them the very best.