Thank you for letting me take part in this dialogue.

This conference call has been discussed at length in the forums. Below is a prioritized list of changes that come not just from me, but from many other members who I collaborated with so that the community’s voice may be heard here today. On the Discussion Boards: Many felt that this discussion should be held in full public view of all Prosper members, in written form. In the future, if Prosper wishes to invite certain members and only allow those members to post, to keep the discussion orderly and on track, there would be no strong objection, but that forum should be visible to all. We want to make this very very clear: Everything mentioned below has been discussed in the forums, most at quite length. The recent "forum war" is only about 2M on the surface. On a deeper level, it's really about the community's ongoing efforts to improve and protect Prosper, and whether we will be encouraged or stymied in this. The thing that I think Prosper is missing is that nobody is taking potshots at 2M just for the fun of it. People are trying to protect Prosper from the sleaziness associated with the way 2M functions. 2M, and the 2M model, will be damaging for Prosper. We must discuss the issues which created the anger, and Prosper's unwillingness to respond appropriately. These deeper issues must be discussed, and Prosper must be made to talk about their understanding and misunderstandings of these fundamental problems. To whit, read this post from a successful Borrower, Rissaroo post here: http://forums.prosper.com/index.php?showtopic=22462&view=findpost&p=275852 As I’m sure you can imagine, asking a diverse group of people to come up with a list of priority changes is no easy task. I have tried to boil it down to the core issues. I have labeled these suggestions in different categories: (Sitewide) – Affects Prosper in general. This list should be easier to implement, small changes or software tweaks or enhancements: (Groups/GLs) - Many have argued for the outright removal of groups, though many others feel changing the group leader incentives would bring Prosper closer to Prosper’s own stated group leader mission: To bring borrowers into prosper. (Lenders/Borrowers) – Primarily affects these people. #1: (Groups/GL) Group rating system –The current system is poorly implemented and subject to manipulation. If the group system is going to be kept, the rating mechanism needs to be changed. Any changes should help to answer these questions 1. Will this change help good borrowers get funded?

2. Will this change help protect lenders from bad borrowers? It would be very hard for a GL to game all of these ratings, and they aren't always appealing to both Borrowers (like Stars for %rates), and Lenders (like ROI). Below are a few ideas that can be implemented at whole or in part. • Group rating = 15% Payment History (groups payments due vs payments received) 25% Amounts owed (groups payments collected vs payments billed) 10% length of history (how old the average loan is) 10% new credit (new loans less than 30 days old) 10% borrower funding success rate (borrowers listed vs borrowers funded) 5% borrower listing success rate (total listings vs listings funded) 15% average APR vs overall market APR 10% supporting lenders vs blocked by lenders Each group would then be assigned a score just like scoreX from 500 to 850, groups scoring below 520 will not be-able to list anymore until their grade is improved. The all groups page then would be ranked in-order of score from 850 down. There would be no way for GLs to manipulate the group rankings, to many variables. Also it would be impossible for any-group to score a 850, again to may variables... • Have a dual star rating system, one that includes community payments and one that excludes community payments. Let each lender choose what they want to use in their advanced searches and standing orders. • Prosper needs a rating system that rates the performance of the Borrower, which is more in line with the whole P2P thought process. Stars for Interest rates achieved for Group Borrowers, vs the Prosper norm at the time the loan was funded. Stars for Payments like we have now. Stars for ROI assuming you bid $50 on each of this group's loans. #2 (Groups/GL) Eliminating up-front financial incentive to group leaders There should be absolutely no up-front incentives for bringing borrowers to the table. If we lenders are in it for three years, so should the GLs. If that means that the GLs don't get their rewards until the loans are fully repaid, that will give the GLs incentive not to waste their time (or ours) on bad loans. #3 (Groups/GL) Display a count of all late payments ever at the top of every group page. And ensure community payments are included in that count. (All late payments EVER, not just loans that are currently late.) #4 (Sitewide) Create an affiliate program to provide a benefit to *anyone* on prosper that refers a new borrower once the borrower gets fully funded and makes either 6 or 12 payments. This should be done in place of either all or a portion of match rewards. However, it needs to not invite people to SPAM message boards, etc to click on their “referral link.” This will also invite the wrong type of people.

#5 (Lending/Borrowing) Interest and bidding a) Provide interest on idle money and money in bids until the loan is approved. b) Reduce the ACH transfer time OR if that is not possible, allow proven lenders (up to Prosper's discretion to determine what that means) to place ACH transfers in and then use the money in transit to place bids. c) Allow borrowers to select a variable listing time when creating their listing such that once their loan is fully funded the loan will end at X:XX time the next day or the day after. Then, if a 10 day listing fully funds in 1 day then the listing time would reduce to 12 days and the person will still get the benefit of the bid-down without having to wait 7 days. At the same time lenders will be more willing to bid on long listings knowing that the listing will end earlier if fully funded. #6 (Lending) Improve Collections Some serious discussions need to be held with lenders and collection specialists. The current situation isn’t working. #7 (Lending) Communication This is a good first step, we need to have a follow up within a set time period to go over what has and hasn’t been implemented and how it is working. Perhaps these should be done quarterly or semi-yearly. Somehow make it available to more people.

Beyond these 7 primary changes we have a list of less immediate, but almost equally important changes that we would like implemented. These are in no particular order: • (GL) Practical guidelines for becoming a group leader. People in the forums can develop it as was discussed prior to the explosion. Read X material, take a quiz. If you pass, good, there you go. • (Lending) Make length of time since the first group loan a searchable parameter in advanced searches and standing orders (whether that loan has been paid off or not) so that people can screen groups based on how long a group has really been in business • (Lending) Allow search and SO's by time left on a listing. • (Lending) We should see a list of loans we have bid on even of the loan is canceled or we are outbid. Months later we can use this to tune our strategies. • (Lending) SO's should have an option to email rather than bid. • (Lending) Allow lenders to invest via IRA or 401K or similar. • (Lending/Borrowing) Add longer periods of length, 3, 5, 7 year loan lengths and for higher amounts. • (Borrowing) Add multiple critiera for group search (portfolio size, age, amount) • (Borrowing) Report delinquencies to all three credit agencies. • (Sitewide) In the API, Add the member Key to the loan table.

• (Sitewide) Use AJAX technology on performance tab of website. • (Sitewide) No more email spam unless it was opt-in. • (Sitewide) Accurate math, a working search, just make the prosper.com website work correctly. Fix the ROI calculations. • (Forum/Communication) Tie forum names to prosper names. Provide feedback and updates in Petri Dish. • (Forum/Communication) Treat the Petri Dish as a ticket system, get someone to ok/decline the ideas (post the decision) and send the ok ones to programmers. BaldEagle has many good suggestions on this thread: http://prospers.org/forum/index.php?topic=871.0 Most of them are also noted on this list. These lists are only the beginning as there were many points brought up that were not included. I sincerely appreciate this chance to help foster change for the betterment of Prosper. Everyone I talked to wants to see Prosper and the P2P lending concept succeed. I cannot stress enough the importance of open, honest, and frequent communication is to the members of the community. Sincerely, Cubbiesnextyr