I agree with CircleT, but it's just a function of credit in general. It's going to be virtually impossible to get the pricing right. Loans always have these same trends, whether it is banks or other entities. A crisis happens and underwriting tightens, returns increase but growth slows. Then in an attempt to grow, competition comes in and underwriting loosens to achieve the growth and maintain returns. Then economy has a hiccup and the loose underwriting results in credit costs (more for some than others). Then it tightens back up. It's just the way credit works and I don't see a reason to think this will ever change, it is just human nature. We are in the loosening phase and compared to history, this phase is lasting a very long time without hiccups. Some think the hiccup is coming now, but I have no clue other than I know it'll seem obvious after the fact.
I don't mean the above to criticize LC or suggest they are doing something wrong. It's just I hope people who don't spend much time around other forms of lending understand this dynamic. Hopefully things don't get as loose as they did in 2008, but they will get loose. Just like it happened in oil -- some people started waving certain parts of the a typical structure and are not feeling the pain from those choices. But you have to bend some to compete or you may not be able to grow enough.
The above is why every strategy I use, I also test that strategy starting in 2007 and seeing how the loans performed when the recession hit. It's important to not just know the expected return, but how wide the range of possible outcomes are.