San Bernardino Shooter Helped By Online Lender

An online lender finds itself in the unfortunate position of having supplied funds to an ISIS-inspired terrorist weeks before he and his wife carried out a shooting spree in San Bernardino, California, that claimed 14 lives and wounded 21 others.

Yesterday (Dec. 8), Prosper Marketplace — a San Francisco-based company that matches individual lenders with pre-approved borrowers — confirmed to Fortune that it arranged a $28,500 loan to Syed Farook, who, along with Tashfeen Malik, was killed in a gun battle with police at the end of the massacre on Dec. 2.

“Yes, unfortunately, they did get their loan from Prosper,” an outside spokesperson for Prosper told the outlet.

Fortune points out that the acknowledgement was an exception to a standard policy for Prosper, which is prohibited by law from disclosing any non-public, personally identifiable information regarding loans that originate on its platform.

The spokesman shared a more formal statement with Fortune, which read as follows: “All loans originated through the Prosper platform are subject to all identity verification and screening procedures required by law, including U.S. anti-terrorism and anti-money laundering laws. As part of our standard procedures, we also confirm that all loan funds are disbursed into a verified U.S. bank account in the borrower’s name. Like all Americans, Prosper is shocked and saddened by recent events in San Bernardino.”

Bloomberg notes that while there are no indications that Prosper is suspected of any wrongdoing, its role in providing funds to one of the San Bernardino shooters is likely to further ignite the debate over the regulation of online loans. Richard X. Bove, an analyst at Rafferty Capital Markets, commented in an interview that the incident could be a “game-changer” for regulators in that regard.

The Bloomberg story additionally points out that Prosper — though it arranged the loan for Farook — did not give him the actual funds; Utah-based lender WebBank handled that task (as it does for all the loans that Prosper facilitates). WebBank declined to comment specifically on Farook’s loan (citing laws that prevent it from doing so) but did issue a general statement of its own, which Bloomberg shared:

“WebBank evaluates all loan applications in accordance with legal requirements, including U.S. anti-terrorism and anti-money-laundering laws. In addition, the bank continually works with regulators to address their inquiries and concerns and will fully cooperate with law enforcement agencies investigating this matter.”

A person familiar with the loan transaction between Prosper and Farook — who asked Bloomberg not to be identified — told the outlet that Farook’s application was clean and that he said he planned to use the funds to consolidate debt.

According to Peter Renton, founder of loan analysis website Lend Academy, platforms like Prosper have high standards of verification when it comes to borrowers.

“However, in this instance,” he went on to tell Bloomberg, “we were dealing with a U.S. citizen with a supposedly clean track record who likely had access to bank accounts, credit cards and other forms of financial instruments. It is my understanding that there are no red flags that could have been identified.”