Jan. 30, 2006


  • Does Zopa set aside reserves from their 1% management fee or does that come out before the "lenders" get their yield? Similarly, does Zopa make the credit decisions? The cost savings realized from the "absence" of a middle-man appear more favorable during the good years of the consumer credit cycle when losses are minimal. As rates rise and there's additional stress on the consumer, asset quality pressures on the balance sheet will increase and the competency of institutions' "lenders" will become more transparent. Sometimes having a middle man can save you money in the long run, especially when the middle man (or woman) has scale.
  • Very Interresting article and I believe the continuing message to credit unions is that to survive and thrive we must be relentless in our quest to create value (efficiency in costs as well as innovative revenue generation opportunities)and then to distribute that value back to our membership. As member-owned financial institutions we must be able to deliver more to members than simply "good rates" and friendly service.