10-Q September 30, 2014

[hoggy1]

Core beat me to the heart for the "Technology" criticism. But please be careful not to include LC with the likes of a "bank". LC accounting and statistics are poor enough to disqualify them as a fiduciary for their own employees retirement plan.

[lascott]

I thought LAP24 was pretty interesting.

http://www.lendacademy.com/lap24-jonathan-morris-titan-bank/
Jonathan Morris is a banker, but he is not your conservative banker who works at a big bank, he is very much an innovative and forward thinking banker. His bank, Titan Bank, was one of the first banks to invest on the Lending Club platform. They started in June of 2013 so they already have some track record with their Lending Club investments.

Peter: Right, yeah that makes sense. I just want to go back to when you started up with Lending Club. When you…obviously for   them it was a big deal to get some banks   on the platform. They’ve beentalking about disintermediating the banks and here we are now, now we talk about partnering with the banks. Did they have to change much when you went to look at them and you obviously had lots of talks in advance of signing a deal, did they have to change much of their processes or they were so compliant that you went, okay, this is great, we just slot right in here and just really making sure it was comfortable. What was that like?

Jonathan: It kind of was a shock at how good Lending Club was when we went there; the level of
policies that they have, the quality of people, some of the verification systems that we were able to see on site really surprised me in a good way. I think there was then…. and over time as things have    evolved, a few things have had been let's say tweaked, but they were running their programs better than probably 90% of the banks do themselves. It worked fairly well for us in that respect.

[Prescott]

This ain't payday loans.  Repeat customers are rare.  Well unless you email them every few months offering borrowers a lower refinance rate and screwing investors in the process.  Guess they've got that covered.

Confirmed Covered! Repeat customers aren't rare

And Prescott, so the rest of their "investment" is in "technology" you say?  What "technology" have they invested in recently?  The same "technology" that caused them to have to buy back (steal) ~1% of all open loans from people due to a "system error"?  The same "technology" that can't hardly keep up with a few hits per minute from one investor and they have to start going on an automation witch hunt?  The same technology that blasts out wholly incorrect data via the API, a different fiasco each week?  The same technology that can't properly calculate a FICO trend, accrued interest, payments remaining?  The same technology that allows shark Folio traders to screw over other traders because the system is so hosed?

er, yes, that's the technology. Sad how both LC and Prosper get this so f'd up and they get silence from most the mouth pieces in this industry.

I guess you could argue they are spending tons of cash on marketing dollars to continue the growth in loans while they figure out how to make a profit? I can go with that. In which case get your liquidity event (LC = IPO, Prosper = sell?), and gtfo before it's falls apart?