I support you 100% and I don't think it's fair the LC is taking such a heavy handed approach. I would probably do the exact same thing, especially since you've been providing your wonderful service for fee.
I plan to light up by account representative on this topic and I encourage others to do so too.
I was somewhat surprised as well when I received the new commercial agreement, but overall I believe this is a positive step for Lending Club in continuing to develop their API developer community. Over the past several months, I've had numerous conversations with a couple of the VP's at Lending Club and wholeheartedly believe they've decided to embrace this spin-off service line and foster the creativity, but in so doing have also done further risk assessment and are putting some necessary controls into place. Having lead IT departments through the past decade of conversion from paper to electronic medical records in the healthcare industry, I watched this industry progress through its adolescence, where everyone with a computer and some medical credentials were writing "best of breed" systems to fit every niche, into a market consolidation because may of these niche systems were focused solely on functionality and neglected things like patient privacy and security. This move ultimately led to large lawsuits and a shift in the regulatory tone, which caused the cost to operate in the healthcare IT space to increase significantly. Similarly, Lending Club, and peer lending platforms in general, I believe are in this adolescent stage where every 13 year old kid with a Mac Book could write an API wrapper and post it on the web, and this is beginning to cause significant risk to the reputable companies, and endanger the privacy and security of their clients. Many of the existing third party sites do use screen scraping technologies, which require users to provide their full Lending Club username and password to this third party. With these credentials, a third party site - or worse someone who hacks a third party site, could do whatever they want with your account including liquidate your holdings and transfer the cash from your Lending Club account to any bank account they pleased. The abstraction provided through the API, and the use of API specific credentials help to limit a Lending Club user's exposure by providing limited access to a third party site on the user's behalf. At present, if a third party site were to compromise your API credentials, the most malicious activity that could be performed would be investing all your free cash in undesirable loans or creating a bunch of portfolios in your account - but your money is still IN YOUR ACCOUNT. As recently as a month ago, Lending Club has communicated with the developer community and released beta API functionality to accomplish some of the things that are currently only accomplished via screen scraping - this is a very positive move in fostering development and creating a functional but more secure environment in which Lending Club's users can have confidence in the security of their accounts even though they are providing their API credentials to a third party site.
Ultimately, you must keep in mind that financial tech is an industry - and one deep rooted in capitalism. This move may not be advantageous to all third party sites, but I think it is beneficial to Lending Club's clients who place their trust in the third party sites that will continue to innovate and adapt, and embrace these necessary changes.
