Author Topic: RIP Lendingclub Notes  (Read 3451 times)

jheizer

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RIP Lendingclub Notes
« on: October 07, 2020, 10:44:19 AM »
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Endings & New Beginnings – LendingClub & Radius Bank

Earlier this year LendingClub announced that it signed an agreement to acquire Radius Bancorp, the holding company of Radius Bank. Combining the two companies is ground-breaking. By becoming the only full-spectrum fintech marketplace bank, and the first public U.S. neobank, LendingClub can unlock new value for borrowers and investors by using the marketplace to both pay less when borrowing and earn more when saving.

Since our announcement, we have been hard at work with the team at Radius, regulators, and partners about the product suite of the potential combined business and what it will mean for our members. In connection with these efforts and as part of our anticipated transition to a bank holding company, we have decided to make some changes that are important to our Notes investors.
 
Closing an Important Chapter—Notes Platform Retiring on December 31, 2020

As we move towards becoming a full-spectrum fintech marketplace bank, we have looked closely at our current and future product suite and have started development of new products to help our members keep more of what they earn and earn more on what they keep. Unfortunately, under a prospective banking framework, it is not economically practical for LendingClub to continue to offer Notes. So, we had to make the difficult decision to retire the Notes platform effective December 31, 2020.

This will not affect the existing Notes you own but means that the last day to purchase Notes will be December 27. In addition, we will no longer accept new accounts effective October 8 and we are targeting to retire the mobile app on November 10.

We do not take this decision lightly. Many of our investors consider Notes as a key piece of their investment portfolio, and our individual investors have been an important part of the history and growth of our company.

Ultimately, we believe new banking capabilities will enable us to serve you even better in the future. People helping people is core to who we are as a company and we’re scoping new products that would retain the peer-to-peer spirit of Notes under the prospective banking framework.

In the meantime, we are working with Radius Bank to develop an exclusive high yield savings account, only available to Notes investors, which will allow you to earn more on the available cash in your Notes account—and any additional cash you want to transfer in.

https://help.lendingclub.com/hc/en-us/articles/360050574891-Important-Updates-to-the-LendingClub-Notes-Platform
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core

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Re: RIP Lendingclub Notes
« Reply #1 on: October 07, 2020, 10:52:17 AM »
I swung by here to see if I had really read that email correctly.

The email reads like they are "only" retiring the Notes platform.  But ummm... what the heck is left of LendingClub without the notes platform?  Am I missing something? Perhaps they are just trying to put lipstick on a pig.  Which is fine with me, as long as one's porcine recreational activities stop there.

As an existing Radius Bank customer, having another account isn't all that $exciting.  But they are good for various schemes.

t_b_o_t

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Re: RIP Lendingclub Notes
« Reply #2 on: October 07, 2020, 10:54:01 AM »
But ummm... what the heck is left of LendingClub without the notes platform?

Yeah, came here wondering the same thing...

BruiserB

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Re: RIP Lendingclub Notes
« Reply #3 on: October 07, 2020, 10:58:21 AM »
Wonder if they just mean the retail notes platform?  Still serving commercial customers and their own bank with notes?

Peter

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Re: RIP Lendingclub Notes
« Reply #4 on: October 07, 2020, 11:00:59 AM »
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Closing an Important Chapter—Notes Platform Retiring on December 31, 2020

This is a sad day for investors. While they have been de-emphasizing retail for years I never expected this development. I am writing a piece on this later today. I would really like to include an on the record quote from an investor or two here. It can be anonymous although I would be including your handle. Please send to peter@lendacademy.com. Thanks.
Publisher of the Lend Academy blog

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Peter

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Re: RIP Lendingclub Notes
« Reply #5 on: October 07, 2020, 11:03:46 AM »
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But ummm... what the heck is left of LendingClub without the notes platform?

The notes platform is only about 5-6% of the origination volume. Most volume is whole loan sales.
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bkcarp00

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Re: RIP Lendingclub Notes
« Reply #6 on: October 07, 2020, 11:06:10 AM »
Sounds like they are basically giving up on the whole "peer-to-peer lending" model and turn into a Wealthfront/Robinhood/Betterment type of company but with an actual bank charter. They will probably keep some lending in place but it will only be for the other big banks/companies/funds that buy the whole loan instead of little pieces. Really this is the end of the original lendingclub model and transformation into a totally new company. Only problem is they are years behind those other companies so it's going to be a hard hill to climb to transform from a peer-to-peer lending company into a totally different model with more competition.
« Last Edit: October 07, 2020, 11:13:32 AM by bkcarp00 »

core

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Re: RIP Lendingclub Notes
« Reply #7 on: October 07, 2020, 11:12:18 AM »
Really this is the end of the original lendingclub model and transformation into a totally new company.

Oh, I don't know about that.  They have been bending over the little guy and giving him the shaft since the very beginning.  This is just the money shot.

Edward Reid

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Re: RIP Lendingclub Notes
« Reply #8 on: October 07, 2020, 11:27:04 AM »
Sad, but it hardly makes any difference to me. I've been blocked from buying notes for about a year now, and it's been obvious that restoring my capability was not on LC's radar. I've been pulling cash out as it accumulates, and assuming that the game has already ended.

It will be convenient (slightly) to have these transfers done automatically. They trumpet a "high yield" savings account. Did no one notice that "high yield" is associated with low grade bonds? Of course it's actually an FDIC insured account, but the use of those words is poor marketing.

And what will that yield be? That's conspicuously missing from the email. Perhaps 0.05% instead of 0.01%? Oh joy. Capital One has recently been advertising accounts paying "five times the national average" without saying exactly how close to zero that average is.

Edward

bkcarp00

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Re: RIP Lendingclub Notes
« Reply #9 on: October 07, 2020, 11:28:02 AM »
Really this is the end of the original lendingclub model and transformation into a totally new company.

Oh, I don't know about that.  They have been bending over the little guy and giving him the shaft since the very beginning.  This is just the money shot.

I supposed you could say the original peer-to-peer lendingclub died when they took away the communication between lender/borrowers and started significantly limiting loans available to the retail platform. There were a few years there in the beginning when it was really only the retail peer-to-peer lending model. Obviously when all these banks/institutional investors started coming in and buying all the good loans was when they gave up on the small retail investor.

GsInvestor

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Re: RIP Lendingclub Notes
« Reply #10 on: October 07, 2020, 11:36:10 AM »
I suspect this. My gut was just telling me this was going to happen. I have about 250k in lending club, just rolling over the payments month after month. Out side of Propser and FundingCircle are there any other investment platforms similar to lending club ?

bkcarp00

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Re: RIP Lendingclub Notes
« Reply #11 on: October 07, 2020, 11:37:53 AM »
And what will that yield be? That's conspicuously missing from the email. Perhaps 0.05% instead of 0.01%? Oh joy.

Given that Radius Bank currently offers only .25% on their high yield savings account. I'll bet they give us an extra .10% as our thank you gift for the years we stayed invested in notes. Lucky us! :D

core

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Re: RIP Lendingclub Notes
« Reply #12 on: October 07, 2020, 11:38:05 AM »
They trumpet a "high yield" savings account. Did no one notice that "high yield" is associated with low grade bonds? Of course it's actually an FDIC insured account, but the use of those words is poor marketing.

And what will that yield be? That's conspicuously missing from the email. Perhaps 0.05% instead of 0.01%? Oh joy.

As a chronic bank account abuser, I've seen "high yield" used quite a bit with interest-bearing checking accounts.  Often times with rewards accounts where you have to use your debit card 12 times a month, 3 of which need to be at liquor stores, or whatever other lame requirements they can think up.

My current Radius account has no such debit card requirements but it only pays 1.00% APY for balances above $2500.  I'm guessing this Flounder account won't be any better than that.  The unlimited 3rd-party ATM fee refunds are nice, and they run frequent promotions for extra cash.  On the debit card I get unlimited 1% cash back but the way they have it locked down it's hard to abuse (restrictions similar to Paypal's debit card).

YellowSeed

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Re: RIP Lendingclub Notes
« Reply #13 on: October 07, 2020, 01:17:02 PM »
If you really want to still invest in these notes, Prosper is still there.  I wonder how long they will offer P2P notes.

YellowSeed

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Re: RIP Lendingclub Notes
« Reply #14 on: October 07, 2020, 01:20:47 PM »
LC stock up 6% today.  The market thinks this is a positive development.