RIP Lendingclub Notes

[YoungFred]

Interesting development. Would appreciate any insight on the following:

1. Does LendingClub plan on maintaining individualized loan selection on the whole loan channel?
2. Does Prosper have similar plans to eliminate the fractional loans channel?

[trixh0]

LC stock up 6% today.  The market thinks this is a positive development.

Actually I do too. I was wondering since May how they will take my LC bread crumbs away from me this time. They were way too big (16% annual interest earned so far in 2020) to leave them untouched. Today I got my answer.

[jrr6415sun]

this makes sense why they didn't bother to renew their florida license for over a year. They've probably been planning this since then. I've been gradually taking out my money since they've had me blocked for so long.

[MarinBB]

Interesting development. Would appreciate any insight on the following:

1. Does LendingClub plan on maintaining individualized loan selection on the whole loan channel?
2. Does Prosper have similar plans to eliminate the fractional loans channel?

Good question - is the whole loan platform closing too?

[lctz]

They turned into a bank.  They start to offer "high yield" Founders Savings account. which basically means borrow from you at a lower rate and lend it with a higher rate-- a bank by definition.  It is good to the stock.  Instead of passing higher yield to you, lendingclub will keep it.

[flyp52]

I'd very much like to see LC implement a program to buy out outstanding notes held by retail investors. Maybe it would allow them to shut down the retail platform earlier, especially if they were willing to pay a small premium for the newer notes?

As an LC investor since 2009, it's been a good run.

[wiseclerk_com]

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 ?

If you are prepared to lend in EUR or GBP you can use several European platforms e.g. https://www.p2p-banking.com/countries/us-which-p2p-lending-marketplaces-in-europe-accept-american-investors/

[core]

They start to offer "high yield" Founders Savings account. which basically means borrow from you at a lower rate and lend it with a higher rate-- a bank by definition.

No, that's not a bank by definition.  Banks create money, they don't lend it out.   Trivial reserve requirements aside.

By the way I just read Peter's piece and I haven't seen worse trash since the last time I was on this site.   Worse, even.  He might as well just get down on his damn knees.  'Course he has been since the start?

[BruiserB]

I'd very much like to see LC implement a program to buy out outstanding notes held by retail investors. Maybe it would allow them to shut down the retail platform earlier, especially if they were willing to pay a small premium for the newer notes?

As an LC investor since 2009, it's been a good run.

Agree. Especially for my IRA account. I already sold a bunch of notes on folio earlier this year. But still have about $13K that I’ve been letting wind down naturally. May try to see if I can unload a few more on folio. Hope they have a way out that doesn’t trigger a $100 annual fee from Strata as it winds down.  I believe their new custodian has a lower minimum before triggering the fee and at one time they told me I could transfer custodians if I wished. I hadn’t done it yet as I still have over $10K in notes. Maybe as a bank they will be able to act as custodian themselves?


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[core]

May try to see if I can unload a few more on folio.

That may be difficult without a time machine.

[BruiserB]

Yea...lol. I see the folio platform went away in August. Shows how much attention I’ve been paying to LC since I liquidated a bunch in Feb/Mar. I wouldn’t be surprised if folio shutting down was one of the nails in the coffin. The at least partial liquidity of the notes made the investment a bit more attractive.

Btw, welcome back, @core.


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[flyp52]

I'd very much like to see LC implement a program to buy out outstanding notes held by retail investors. Maybe it would allow them to shut down the retail platform earlier, especially if they were willing to pay a small premium for the newer notes?

As an LC investor since 2009, it's been a good run.

Agree. Especially for my IRA account. I already sold a bunch of notes on folio earlier this year. But still have about $13K that I’ve been letting wind down naturally. May try to see if I can unload a few more on folio. Hope they have a way out that doesn’t trigger a $100 annual fee from Strata as it winds down.  I believe their new custodian has a lower minimum before triggering the fee and at one time they told me I could transfer custodians if I wished. I hadn’t done it yet as I still have over $10K in notes. Maybe as a bank they will be able to act as custodian themselves?

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Yes LC should waive fees going forward too, We no longer have the ability to sell notes on the secondary market, so as the amount invested in notes slowly declines as payments are made, we are exposed to fees for as long as five years if we hold 60 month notes. Or LC should just buy out our outstanding notes now.

[LA87654]

"Yes LC should waive fees going forward too, "

Aren't they 3rd party fees?  I doubt LC has much leverage anymore if they aren't bringing in new accounts to the 3rd party.

[Edward Reid]

as the amount invested in notes slowly declines as payments are made, we are exposed to fees for as long as five years if we hold 60 month notes

Aren't all LC fees directly proportional to the note or payment size? And thus will decrease along with the remaining principal?

Edward

[macroman7799]

I think they're talking about IRA custodian fees for account maintenance and transfer which can be substantial.