Commitments and Contingencies In the normal course of its operations, Prosper becomes involved in various legal actions. Prosper maintains provisions it considers to be adequate for such actions. Prosper does not believe it is probable that the ultimate liability, if any, arising out of any such matters will have a material effect on Prosper's financial condition, results of operations or cash flows. Future Minimum Lease Payments Prosper has entered into various non-cancelable operating leases for certain offices with contractual lease periods expiring between 2022 and 2027. The table below presents future minimum rental payments, net of minimum sublease rentals of $5.3 million, for the remaining terms of the operating leases (in thousands): 2019 4,536 2020 4,683 2021 4,456 2022 4,319 2023 847 Thereafter 387 Total future operating lease obligations $ 19,228 The payments in the above table include amounts that have been accrued for as part of the restructuring liability in Note 14 Restructuring. Such accrual balances related to operating facility leases were $2.0 million at December 31, 2018. Rental expense under operating lease arrangements was $4.2 million, $4.7 million and $6.9 million during the years ended December 31, 2018, 2017 and 2016, respectively. Operating Commitments Prosper has entered into an agreement with WebBank, under which all Borrower Loans originated through the marketplace are made by WebBank under its bank charter. On February 1, 2019, Prosper and WebBank extended the terms of their Agreement. See Footnote 22. Pursuant to the agreement, the marketing fee that Prosper receives in connection with the origination of each loan is partially reduced by an amount (the Designated Amount) calculated as a percentage of the principal amount of such loan based on the aggregate principal amount of loans originated for the applicable month. To the extent the aggregate Designated Amount for all loans originated during any month is less than $143,500, Prosper is required to pay WebBank an amount equal to such deficiency. Accordingly, the minimum fee is $1.7 million for the years ended 2019, 2020 and 2021. The minimum fee is $0.1 million for the year ended 2022. Additionally, under the agreement with WebBank, Prosper is required to maintain minimum net liquidity of $15 million at all times during the term of the agreement. Net liquidity is defined as the sum of Cash and Cash Equivalents and Available for Sale Investments. Violation of this covenant can result in termination of the contract with WebBank. At December 31, 2018 Prosper was in compliance with the covenant. Loan Purchase Commitments Prosper has entered into an agreement with WebBank to purchase $25.9 million of Borrower Loans that WebBank originated during the last two business days of the year ended December 31, 2018 and the first business day of the quarter ending March 31, 2019. Prosper will purchase these Borrower Loans within the first three business days of the quarter ending March 31, 2019. Repurchase and Indemnification Contingency Under the terms of the loan purchase agreements between Prosper and investors that participate in the Whole Loan Channel, Prosper may, in certain circumstances, become obligated to repurchase a Borrower Loan from an investor. Generally, these circumstances include the occurrence of verifiable identity theft, the failure to properly follow loan listing or bidding protocols, or a violation of the applicable federal, state, or local lending laws. The fair value of the indemnification and repurchase obligation is estimated based on historical experience and the initial fair value is insignificant. Prosper recognizes a liability for the repurchase and indemnification obligation when the Borrower Loans are issued. Indemnified or repurchased Borrower Loans associated with violations of federal, state, or local lending laws or verifiable identity theft are written off at the time of repurchase or at the time an indemnification payment is made. The maximum potential amount of future payments associated under this obligation is the outstanding balances of the Borrower Loans issued through the Whole Loan channels, which at December 31, 2018 is $3.6 billion. Prosper has accrued $0.9 million and $0.8 million as of December 31, 2018 and 2017 respectively in regard to this obligation. Securities Law Compliance In 2017, Prosper made the final annual installment of $3 million regarding a settlement to a class action lawsuit that was agreed to in 2013 (the "2013 Settlement"). SEC Inquiry In May 2017, Prosper notified Note investors that we had recently become aware of an error in the manner in which we calculated the annualized net return (ANR) and seasoned annualized net return numbers displayed to note investors. The Company promptly provided note investors with current, corrected ANR and seasoned ANR calculations. The staff of the Securities and Exchange Commission (the SEC) conducted an investigation as to whether violations of federal securities laws occurred in connection with the error. PFL fully and voluntarily cooperated with the investigation and recently made an offer of settlement to resolve the matter with the SEC. The proposed settlement would be entered into by PFL without admitting or denying the SECs findings and would resolve an alleged violation of Section 17(a)(2) of the Securities Act of 1933. Under the terms of the proposed settlement, PFL would pay a civil monetary penalty of $3 million and agree not to commit or cause any future violations of Section 17(a) of the Securities Act. The proposed settlement remains subject to approval by the SECs Commissioners. The proposed penalty of $3 million has been accrued as of December 31, 2018 in Accounts Payable and Accrued Liabilities on the Consolidated Balance Sheet and in Other Expenses, Net on the Consolidated Statement of Operations.