With credit markets freezing up, I thought it might be a good time to put some money into Prosper.com–a site that lets you loan money to individuals. It seemed reasonable that if people couldn’t get loans elsewhere you might be able to make a reasonable return filling the role that banks have filled in the past. Unfortunately they aren’t allowing you to lend money to people. The best I can tell the SEC has decided that they need to be more tightly regulated and wants them to apply for some type of license or certification.
I’m concerned that in trying to fix things the government is going to put too many regulations in place to try to protect people from themselves and in the end make things even worse.