No, lending Club used to disclose step by step how your grade and rate was determined. And there was a market index in the rate calculation
Its in the prospectus for the notes. More recent prospecti have had fewer words about this. If you go back several years tho it is more explicit. They start with a "base rate" set by committee. Its not quite a market index, tho that is part of it.
From the June 2008 prospectus...
https://www.sec.gov/Archives/edgar/data/1409970/000089161808000318/f41480orsv1.htmThe interest rates are assigned to borrower loan grades in three steps. First, the Lending Club base rates are determined. Second, an assumed default rate is determined that attempts to project loan default rates. Third, the assumed default rate is used to calculate an upward adjustment to the base rates, which we call the “Adjustment for Risk and Volatility.”
The base rates are set by the interest rate working group. This group generally meets on a weekly basis and includes our Chief Executive Officer; Chief Operations Officer; Director, Credit; Vice President, Collections; and Director, Product Strategy. The working group’s objective in setting the Lending Club base rates is to allocate the interest rate spread that exists between the cost of credit for borrower members and the return on bank deposits we understand are available to lender members. To make this calculation, the working group calculates the average between the interest rate for unsecured consumer credit published by the Federal Reserve, “commercial banks; all accounts,” in Federal Reserve Statistical Release G19, and the interest rate for 6-month certificates of deposit, “secondary market; monthly,” published by the Federal Reserve in Federal Reserve Statistical Release H15. By calculating this average, the working group determines an initial allocation of the spread between lender members and borrower members.
Next, the working group modifies this initial allocation, based on the following factors:
• general economic environment, taking into account economic slowdowns or expansions;
• the balance of supply and demand on the Lending Club platform, taking into account whether borrowing requests exceed lender member commitments or vice versa; and
• competitive factors, taking into account the rates set by other social lending platforms and the rates set by major financial institutions.
The working group adjusts the Lending Club base rates from time to time based on this methodology. In applying the adjustment to the base rate, the working group has established a different base rate for A grades than for other loan grades.
When the working group set our current base rate on June 3, 2008, effective June 17, 2008, the interest rate for unsecured consumer credit published by the Federal Reserve, “commercial banks; all accounts,” in Federal Reserve Statistical Release G19 was 13.71%, and the average interest rate on 6-month certificates of deposit, “secondary market; monthly,” published by the Federal Reserve in Federal Reserve Statistical Release H15 was 2.84%. The average of these two interest rates was 8.27% (calculated as (13.71% + 2.84%)/2 = 8.27%). Applying the adjustments described above, the working group determined an adjustment of -0.97% for A loan grades and -0.47% for other loan grades. Therefore, the working group set the Lending Club base rate as 7.30% for A loan grades and 7.80% for other loan grades.
After the working group sets the Lending Club base rates, we determine assumed default rates. The assumed default rate reflects Lending Club’s attempt to project the default rate for member loans of the loan grade.
Lastly, the working group adjusts the base rates upward to reflect an adjustment correlated to the assumed default rate, which we call the “Adjustment for Risk and Volatility.” Currently, the working group has set this adjustment as an interest rate equal to twice the assumed default rate. Accordingly, to determine the final interest rates that apply on the Lending Club platform, the working group adds twice the assumed default rate to the base rates.
So that pretty much covers all the possible bases. You have some indexes, then economic conditions, supply & demand, and competitive factors. This covers both extremes of methodology. The mechanical (ie indexes) at one extreme, and the discretionary (supply & demand, competitive factors) at the other.
We have no idea what changes may have been made between 2008 and 2017, but I'll guess that there's still a committee, and they still consider the same range of factors (because like ...what else is there?).