I merely think that they're in a super-position of states and that no control has yet been established over the sale of notes into secondary markets, much the same way that tax treatment of "member dependent notes" is also still a matter of interpretation.
And much the same way that the status of "loans" (now "notes") were in a super-position of states before the SEC "observed".
So, to answer directly, is LendingClub doing anything "illegal"? Magic 8-ball says "unclear", since the only way to find out if they happen to be is if some regulatory entity steps in and says that they are, after the fact. Don't get me wrong, I think that sucks - but it is a risk...