Lend Academy Network Forum

Lending Club Discussion => Investors - LC => Topic started by: flyp52 on October 09, 2013, 03:47:41 PM

Title: Accrued interest no longer reported in Account Total
Post by: flyp52 on October 09, 2013, 03:47:41 PM
I like it better this way, now it matches the monthly statements.  It never made sense to me to include it in the first place.
Title: Re: Accrued interest no longer reported in Account Total
Post by: ThinleyWangchuk on October 09, 2013, 05:23:28 PM
It is still the same for my accounts
Title: Re: Accrued interest no longer reported in Account Total
Post by: yojoakak on October 09, 2013, 06:12:55 PM
You mean on the Account Summary?

I'm not seeing that, either.
Title: Re: Accrued interest no longer reported in Account Total
Post by: yojoakak on October 09, 2013, 07:05:56 PM
Just checked my Account Summary page again and Accrued Interest is gone.

Not just gone from Account Total but taken off the page entirely!
Title: Re: Accrued interest no longer reported in Account Total
Post by: core on October 09, 2013, 07:21:58 PM
I wonder what brought this about?  Excellent.  It's been a few weeks since we had a major event or scandal around here.

For what it's worth, I'm still able to see accrued interest by going to the More Details (https://www.lendingclub.com/account/lenderAccountDetail.action) page.
Title: Re: Accrued interest no longer reported in Account Total
Post by: Randawl on October 09, 2013, 07:36:36 PM
I wonder what brought this about?  Excellent.  It's been a few weeks since we had a major event or scandal around here.

For what it's worth, I'm still able to see accrued interest by going to the More Details (https://www.lendingclub.com/account/lenderAccountDetail.action) page.

I was a few minutes ago, too.  Until just now.  It's gone!  Looks like they were making the changes to people's accounts piecemeal.
Title: Re: Accrued interest no longer reported in Account Total
Post by: core on October 09, 2013, 07:43:19 PM
I think this is accounting games to boost their numbers for this quarter.  The borrower owes LC the accrued interest, but since we are essentially just placing bets on the outcome of that loan, one could argue that from their point of view the liability is not created until the bet wins (the borrower pays).
Title: Re: Accrued interest no longer reported in Account Total
Post by: LonghornSF on October 09, 2013, 09:50:30 PM
Wow, why don't they at least send out an email about these types of changes instead of leaving us to figure it out.  >:(   
Title: Re: Accrued interest no longer reported in Account Total
Post by: LonghornSF on October 09, 2013, 09:51:31 PM
Wow, why don't they at least send out an email about these types of changes instead of leaving us to figure it out.  >:(

I don't think it works that way. LC has no vested interest in how the loan performs other than collecting a servicing fee.
Title: Re: Accrued interest no longer reported in Account Total
Post by: core on October 09, 2013, 10:09:30 PM
I don't think it works that way. LC has no vested interest in how the loan performs other than collecting a servicing fee.

LC owns the loans.  You have a derivative.  While LC may not have a vested interest because you have insured them (with certain exceptions anyway), if they count the accrued interest from borrower members as revenue without also recognizing the liability to the note holders at that same instant, then they've inflated the balance sheet quick-like.  Keep in mind with all the nonperforming notes the difference could be substantial as a percentage.  Eventually you have to pay the piper though.
Title: Re: Accrued interest no longer reported in Account Total
Post by: Dennis on October 10, 2013, 12:42:24 AM
Nice observation.  This is what is so great about this board, I wouldn't have noticed that change so quickly, and now that I know about it I'm happy the accrued interest figure is gone (I'm easily pleased) - that number held little to no meaning for me.  I like real time, not maybe or should-be or will-be time.  Good move, nice improvement for LC.  I give it a 9.5 on the 10 scale.
Title: Re: Accrued interest no longer reported in Account Total
Post by: LonghornSF on October 10, 2013, 02:31:36 AM
I don't think it works that way. LC has no vested interest in how the loan performs other than collecting a servicing fee.

LC owns the loans.  You have a derivative.  While LC may not have a vested interest because you have insured them (with certain exceptions anyway), if they count the accrued interest from borrower members as revenue without also recognizing the liability to the note holders at that same instant, then they've inflated the balance sheet quick-like.  Keep in mind with all the nonperforming notes the difference could be substantial as a percentage.  Eventually you have to pay the piper though.

It's a nice conspiracy theory but I don't buy it. Lendingclub will not be valued based upon its balance sheet, I promise you that. There are a lot of IPO puffery techniques out there (i.e. loosening underwriting standards) but this one isn't going to boost their value. LC would be required to recognize the associated liability anyways under GAAP.
Title: Re: Accrued interest no longer reported in Account Total
Post by: Peter on October 10, 2013, 08:11:51 AM
I have lobbied against the Accrued Interest number for a long time. I think it is confusing for many investors and also provides a mismatch at the end of the month with the statement numbers. Now, they will be in sync which is a good thing.
Title: Re: Accrued interest no longer reported in Account Total
Post by: New Jersey Guy on October 10, 2013, 08:40:10 AM
Accrued interest for each note is now being shown on the "Loan Performance" page.  Look for it right below "Credit Score Change".

https://www.lendingclub.com/foliofn/loanPerf.action?loan_id=739193&order_id=12105901&note_id=4545846 (https://www.lendingclub.com/foliofn/loanPerf.action?loan_id=739193&order_id=12105901&note_id=4545846)
Title: Re: Accrued interest no longer reported in Account Total
Post by: thezinfan on October 10, 2013, 10:43:50 AM
Indifferent about the change, but really scratching my head. Why wouldn't they send out an email about this in advance? Since they didn't, I had already sent of an email to my rep asking why my balance is screwy. I'm sure customer service is fielding extra calls/emails today.
Title: Re: Accrued interest no longer reported in Account Total
Post by: GS on October 10, 2013, 10:45:31 AM
I didn't mind accrued interest being included, but I thought it was strange and somewhat misleading to include it in the account total before it's actually been paid.
Title: Re: Accrued interest no longer reported in Account Total
Post by: lender_john on October 10, 2013, 10:46:19 AM
I prefer this way.. but as always it would be nice if there was some sort of notice...
Title: Re: Accrued interest no longer reported in Account Total
Post by: Randawl on October 10, 2013, 06:45:05 PM
LC just posted an explanation for removing accrued interest.

Quote
Recently, accrued interest was removed from the Account Total calculation. Accrued interest is interest on a Note that has accumulated, but has not yet been paid. Interest accrues regardless of Note status, whether the Note is current or late, however, interest does not accrue on Notes that are in default or that have been charged off.  Accrued interest does not increase the actual cash in the account nor the account’s Net Annualized Return. By removing accrued interest, investors will experience a moderate drop in the Account Total value until such time as the payments actually arrive. Importantly, the change in value is due to accrued interest being removed from the calculation and does not reflect an actual change in the total realized account value.
 

Accrued interest is a valuable tool for understanding the cash flow of an account. As such, accrued interest is still reported and can be viewed on the More Details page. In addition, accrued interest can be viewed on a Note level by navigating to the My Notes section and on the Loan Performance Page of a specific Note.


https://kb.lendingclub.com/index.php?View=entry&EntryID=258
Title: Re: Accrued interest no longer reported in Account Total
Post by: Xin on October 11, 2013, 03:47:38 AM
They should have a patchnotes update regular on their blog. Those of you who play video games might know what I'm talking about.
Title: Re: Accrued interest no longer reported in Account Total
Post by: Rob L on October 12, 2013, 09:36:42 AM
I'll throw in my 2 cents worth and say I like  the change. When I first started trying to figure how things worked it just added a little to the confusion. Later I viewed it cynically as a lame attempt by LC to make things look better than they actually are. LC was open to criticism for it and I think that's why this was done. It was a smart move on LC's part to move it down to the additional details area.

I strongly agree with everyone before that criticized LC for not having provided its customers with some advanced notice (or even simultaneous notice) of the change. I would appreciate a simple one-way, "do not reply to", opt-in or opt-out email service for changes such as this, the more important "employment" change to browsenotes recently, etc.  I think LC would certainly get a nice round of applause from the forum members here if they provided such.
Title: Re: Accrued interest no longer reported in Account Total
Post by: core on October 12, 2013, 10:46:55 AM
I would appreciate a simple one-way, "do not reply to", opt-in or opt-out email service for changes such as this, the more important "employment" change to browsenotes recently, etc.

Hear, hear!  This is badly needed.  I would be pleasantly surprised if that ever happened.  I believe they use these unannounced changes to throw off automated tools.  Also they can secretly disclose such changes ahead of time to select insiders/institutions/journalists to make them feel more valued, give them an edge, or whatever the end goal might be.  If everyone had the same information, of what value would having direct numbers for higher-ups be?