Wells Fargo has, reportedly, prohibited its employees from participating in peer-to-peer (P2P) lending citing it as a competitive activity and creates conflict of interest.
The move by Wells Fargo is a result of increased tensions between banks and P2P platforms, reported Financial Times.
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A message sent by a Wells Fargo compliance officer recently to its staff read, "Going forward, please refrain from making any new P2P investments/loans.
"If possible, exit existing investments as soon as practical (without forcing a loss) or when the loans are paid off," officer added.
P2P lenders such as Lending Club and Prosper offer loans to borrowers at low-interest rates and give lenders high returns on their investments, which according to some banks is a threat.
Wells Fargo spokeswoman told the website that she could not confirm the message but that the bank’s code of ethics states that staff should not have an investment in a privately held business that competes with the bank, or causes an actual or potential conflict of interest.
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