Author Topic: New Member - Question about residency  (Read 8824 times)

craigwbryant

  • Newbie
  • *
  • Posts: 18
    • View Profile
    • Email
New Member - Question about residency
« on: April 13, 2015, 09:07:51 PM »
Greetings all.   I am an new member.  I just happened across some information on P2P lending the other night and I'm really considering getting involved as an investor.  The problem is my location.  I am in Maryland, and right now Lending Club is illegal based on the research I have done.  However, I am active duty military and my legal residence is my home state of VA, where LC is legal.  Based on my residency status, would I be allowed to participate as an investor on LC?

SBryantMS

  • Jr. Member
  • **
  • Posts: 95
    • View Profile
Re: New Member - Question about residency
« Reply #1 on: April 13, 2015, 10:45:10 PM »
Use your legal residence.  Everything with LC happens electronically.  In my 4+ years, I have never received a snail mail from LC

craigwbryant

  • Newbie
  • *
  • Posts: 18
    • View Profile
    • Email
Re: New Member - Question about residency
« Reply #2 on: April 15, 2015, 09:05:54 PM »
So, I wound up contacting LC directly to ask them about this (call it paranoia, but with my security clearance its best to stay on the very straight and narrow).  Unfortunately, their interpretation of the law precludes me from making an investment with LC right now.  So, until I relocate to a legal state, I won't be doing any P2P lending.  Guess I need to find some other way to fill my time for the time being until the Army moves me again.

Lovinglifestyle

  • Hero Member
  • *****
  • Posts: 902
    • View Profile
    • Email
Re: New Member - Question about residency
« Reply #3 on: April 15, 2015, 09:36:18 PM »
Did they also tell you you couldn't invest through Folio?

craigwbryant

  • Newbie
  • *
  • Posts: 18
    • View Profile
    • Email
Re: New Member - Question about residency
« Reply #4 on: April 15, 2015, 09:46:06 PM »
The note doesn't say anything about Folio, though I never asked about it.  I wasn't really prepared to go the Folio route, wanted to get my feet wet with regular P2P before moving onto Folio.

neals384

  • Full Member
  • ***
  • Posts: 113
    • View Profile
Re: New Member - Question about residency
« Reply #5 on: April 17, 2015, 01:17:03 PM »
Assuming you file federal and state taxes using VA address, I don't see a problem. 

craigwbryant

  • Newbie
  • *
  • Posts: 18
    • View Profile
    • Email
Re: New Member - Question about residency
« Reply #6 on: April 17, 2015, 02:43:51 PM »
That was kind of my view of the situation, but evidently LC interprets things differently.  That's fine, its their right to interpret those things as they see fit.  Gives me time to get things really figured out, stack up even more cash, and once I get to a state where its legal, I can go to work.  I looked into the Folio thing.  For me, right now, with the $29 per month fee, I would be hard-pressed to have my earnings overcome that fee, so I think I am going to stay out of that.

bobeubanks

  • Sr. Member
  • ****
  • Posts: 273
    • View Profile
Re: New Member - Question about residency
« Reply #7 on: April 17, 2015, 03:21:48 PM »
If your legal residence is in a legal state and you use that address, I can't imagine that there'd be a problem. The LC representative may not even be trained on such an issue and just gave an answer.

craigwbryant

  • Newbie
  • *
  • Posts: 18
    • View Profile
    • Email
Re: New Member - Question about residency
« Reply #8 on: April 17, 2015, 07:25:43 PM »
You are likely correct on training/knowledge.  The military is a very small segment of the population, and probably an even smaller subset of the population looking to invest with LC.  It is not surprising that they aren't prepared to deal with unique circumstances like this.  Like I said, while disappointed because I was looking forward to trying out LC, I understand and respect their business policies.  Hopefully more states get added soon or I move somewhere where LC is legal.  I'm not exactly sure how it is that some states can make it illegal to do business with LC since post-IPO its a publicly traded company, so I can in essence invest in the company but can't do business with them.  That doesn't pass the common sense test to me, but I'm not a lawyer so I am sure there is some nuance I am missing/overlooking.

Booleans

  • Jr. Member
  • **
  • Posts: 74
    • View Profile
    • Email
Re: New Member - Question about residency
« Reply #9 on: April 18, 2015, 08:55:12 PM »
I just used a friend's address for 4 years since I live in Michigan. LC only sends you documents electronically.

macroman7799

  • Newbie
  • *
  • Posts: 35
    • View Profile
Re: New Member - Question about residency
« Reply #10 on: April 19, 2015, 01:50:11 AM »
You are likely correct on training/knowledge.  The military is a very small segment of the population, and probably an even smaller subset of the population looking to invest with LC.  It is not surprising that they aren't prepared to deal with unique circumstances like this.  Like I said, while disappointed because I was looking forward to trying out LC, I understand and respect their business policies.  Hopefully more states get added soon or I move somewhere where LC is legal.  I'm not exactly sure how it is that some states can make it illegal to do business with LC since post-IPO its a publicly traded company, so I can in essence invest in the company but can't do business with them.  That doesn't pass the common sense test to me, but I'm not a lawyer so I am sure there is some nuance I am missing/overlooking.

P2P lending is a form of banking and there are rules about who can engage in banking activities, some of these are at the state level.

craigwbryant

  • Newbie
  • *
  • Posts: 18
    • View Profile
    • Email
Re: New Member - Question about residency
« Reply #11 on: April 20, 2015, 01:09:04 PM »
You are likely correct on training/knowledge.  The military is a very small segment of the population, and probably an even smaller subset of the population looking to invest with LC.  It is not surprising that they aren't prepared to deal with unique circumstances like this.  Like I said, while disappointed because I was looking forward to trying out LC, I understand and respect their business policies.  Hopefully more states get added soon or I move somewhere where LC is legal.  I'm not exactly sure how it is that some states can make it illegal to do business with LC since post-IPO its a publicly traded company, so I can in essence invest in the company but can't do business with them.  That doesn't pass the common sense test to me, but I'm not a lawyer so I am sure there is some nuance I am missing/overlooking.

P2P lending is a form of banking and there are rules about who can engage in banking activities, some of these are at the state level.

Interesting.  I kind of figured (again, based on my limited knowledge/exposure to banking laws) that once the SEC filing went in and the IPO took place that things would then shift to a national level and once it was legal at the national level then states couldn't supersede the national level.  That's probably an overly simplistic way of looking at it though.  Apparently MD doesn't even allow secondary trading through Folio.