Author Topic: Lending Club's Own Credit Risk  (Read 7435 times)

DanB

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Re: Lending Club's Own Credit Risk
« Reply #15 on: October 06, 2014, 09:21:32 PM »
I believe Prosper implemented the BRV to bolster their credibility.  At the time, their survival was very much in doubt, and having the BRV was a way to reassure lenders (especially those institutional ones) that a Prosper BK would not mean a total loss for lenders.

As the market leader, evidently lenders are less worried that LC will go BK anytime soon.

Just my opinion.

Your opinion is quite reasonable & imo correct. if you just add the word retail. It should read, evidently retail lenders are less worried that LC will go BK anytime soon.  Because LC institutional investors have been protected by a BRV for over a year now. i won't speculate if that means that they're more worried than us retail..................but it certainly suggests that they're, among other things, wiser than us.

So, Prosper institutional, Prosper retail & LC institutionals all have this layer of protection.  LC retail investors are the only ones that aren't protected & evidently only a few of us have voiced our displeasure or concern. History will be the judge as to whether our seemingly nonchalant attitude is wise or foolish. 

Randawl

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Re: Lending Club's Own Credit Risk
« Reply #16 on: October 06, 2014, 09:47:45 PM »
I believe Prosper implemented the BRV to bolster their credibility.  At the time, their survival was very much in doubt, and having the BRV was a way to reassure lenders (especially those institutional ones) that a Prosper BK would not mean a total loss for lenders.

As the market leader, evidently lenders are less worried that LC will go BK anytime soon.

Just my opinion.

Your opinion is quite reasonable & imo correct. if you just add the word retail. It should read, evidently retail lenders are less worried that LC will go BK anytime soon.  Because LC institutional investors have been protected by a BRV for over a year now. i won't speculate if that means that they're more worried than us retail..................but it certainly suggests that they're, among other things, wiser than us.

So, Prosper institutional, Prosper retail & LC institutionals all have this layer of protection.  LC retail investors are the only ones that aren't protected & evidently only a few of us have voiced our displeasure or concern. History will be the judge as to whether our seemingly nonchalant attitude is wise or foolish.

And some have more than just a BRV.  They have a pool of money set aside for them in case their losses get above a preset threshold!

P2PFact

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Re: Lending Club's Own Credit Risk
« Reply #17 on: October 06, 2014, 10:38:40 PM »
And I think I read from one of Peter's post that Lending Club's LC Advisors is bankruptcy remote. But that's for accredited investors. Don't think LC's credit risk is a big deal for us now but guess we need to keep track of LC's other liabilities from now on.

Not sure if Peter get a chance to read this post. Would be great if he can pass on this message/concern to LC's management. LC is definitely leader in P2P and as leader they should hold higher standard than others not lower. If Prosper can do it, then LC should be able to do it and do better.

Maybe another way is we should pool our money together and buy LC's credit default swap......


hoggy1

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Re: Lending Club's Own Credit Risk
« Reply #18 on: October 07, 2014, 01:53:00 PM »
Just started a poll on this matter - http://www.lendacademy.com/forum/index.php?topic=2701.0
Steve

SeanG

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Re: Lending Club's Own Credit Risk
« Reply #19 on: October 08, 2014, 09:54:19 AM »

Maybe another way is we should pool our money together and buy LC's credit default swap......

I like the idea of working together to get retail investors the same protection that institutional investors enjoy.

LC would hate to be painted with the label of tilting the playing field in favor of the big guy. The threat of being painted with that brush might get them to do the right thing and offer bankruptcy protection for all of its investors, not just the Wall Street elites.

Victor

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Re: Lending Club's Own Credit Risk
« Reply #20 on: October 08, 2014, 10:19:17 AM »

Maybe another way is we should pool our money together and buy LC's credit default swap......

I like the idea of working together to get retail investors the same protection that institutional investors enjoy.

LC would hate to be painted with the label of tilting the playing field in favor of the big guy. The threat of being painted with that brush might get them to do the right thing and offer bankruptcy protection for all of its investors, not just the Wall Street elites.

+1