Peer-to-peer loans might seem like a fringe asset class. After all, this is still a tiny market, and there have only been one or two securitizations to date. But after some early losses and regulatory hiccups, Prosper, Lending Club and other online lenders have gotten their acts together. They are growing fast, and in the process taking some of banks’ best customers.  As Glen Fest reports, the primary driver of loan activity at these two market leaders is credit card debt consolidation.

So while there may not be much securitization of P2P loans — yet — online lenders are taking assets that might otherwise be used as collateral for asset-backed securities.

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