Some Investors Locked Out of Investing in LendingClub Loans

Over the last 24 hours we’ve received several messages from Lend Academy readers alerting us that they have received information that they are no longer able to invest in LendingClub notes. There is is also an active discussion on the Lend Academy forum. One member shared the email they received below.

Hi ****,

We wanted to let you know that new LendingClub Notes are temporarily unavailable in your state. We’re working diligently to address this matter and apologize for the inconvenience.

This won’t disrupt the servicing of your existing Notes, but it does mean that you won’t be able to purchase new Notes for the time being or access the LendingClub mobile app as its primary purpose is to purchase new LendingClub Notes. Consequently, you may notice cash accumulating in your account from principal and interest payments.

During this time, you may still participate in the secondary market. Learn more here.

We appreciate your patience, and as a small token of our gratitude for your business, we’d like to offer you an Amazon gift card.*

Thank you,
The LendingClub Team

LendingClub has also updated their state eligibility map shown below. It’s clear that more states are now designated as trade-only states which limits investors to participating only on LendingClub’s secondary market.

LendingClub state eligibility as of 9/24/2019

In order to better understand which states were effected I was able to pull a cached version of the same map. New York, Florida, Texas and Arizona investors have all been affected by the change. Given that these are highly populous states it is likely that thousands of investors are impacted.

Previous state eligibility

The disappointing part of this news is that LendingClub is not providing details on why this change was made or how long they expect the restrictions to last. We reached out to LendingClub last night for comment and received the following response:

We made the decision to temporarily stop offering new LendingClub Member Payment Dependent Notes (Notes) to investors in certain locations.  Investors in all locations except Ohio can still buy Notes on the secondary market, just as they can in other trade-only states.

This action affects a very small amount of  total investor funding. It does not affect existing Notes or servicing.  As usual, investors may also continue to buy or sell previously issued Notes on the secondary trading platform.

Frustrated investors, many who have been investing for the long haul, have also reached out to LendingClub but have received no further information than what is posted above. While whatever happened behind the scenes at LendingClub only affects a small fraction of their overall investor base it is disappointing that LendingClub is not providing any transparency on the news. Investors deserve to have some clarity here. We will update this post if we receive any further information.

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Randy Katz
Randy Katz
Sep. 24, 2019 12:05 pm

I called LC Investor Support and escalated to 2d level as well. Got told by both reps that “I can’t tell you what changed”. What a crock of BS.

RONNIE RAHE
RONNIE RAHE
Oct. 16, 2019 9:46 am
Reply to  Randy Katz

I don’t understand why they’re being so secretive about this. I don’t really mind that they “temporarily” shut us out, but it does upset me that they won’t be transparent about why. Bad PR move on their part.

Scottieeeee
Scottieeeee
Sep. 24, 2019 2:05 pm

This bozo organization needs to crash and burn.

Jeff
Jeff
Sep. 25, 2019 5:53 am

I didn’t get an email or any notification from Lending Club that this had happened. Extremely unprofessional for a financial institution to not be more transparent about potential regulatory issues.

William
William
Sep. 25, 2019 10:46 am

I have an appreciable amount invested on their platform and I’m getting no transparency. I suspect, looking at the states affected, that possibly they have excess capital originating from those states so they turned off the ability to fund new notes. If not, I suspect it is a financial decision on their part but their lack of transparency is what is most concerning. Trust is EVERYTHING when investing, and once lost it cannot be regained. If this drags on for very long I will move my investment off their platform – its earnings are disappointing anyway.

David Hamel
David Hamel
Sep. 25, 2019 5:45 pm

I’ve tried to imagine what event would cause something like this. For me, the only scenario that seems to fit is something like this: Imagine that their legal department discovered some liability particular to selling new notes in the affected states. The legal department’s recommendation would be to suspend sales until they can restructure the terms of service to address the liability. They might then require that residents of these states agree to the amended TOS before new notes can be purchased on the platform. What they /wouldn’t do/ in a case like this is announce the reason for their action. At least not until they’ve got their liability addressed, if even then. Figure out what the new trade-only states have in common (special rules about accredited investors, e.g.?) and you might figure out what triggered this action.

Jeff
Jeff
Oct. 14, 2019 11:32 am
Reply to  David Hamel

Before the ipo my state of AZ wouldn’t allow. After ipo, they gained access. Then apparently lost it. My guess is a change in legislation in AZ.

Jeff
Jeff
Oct. 14, 2019 12:06 pm
Reply to  Jeff

I have always considered LC (pre-ipo and current) to carry a beta risk of 1.25 to a common Nasdeq stock. Therefore when there were whispers of 4th business cycle entrance, I culled.
Although LC entrance of its 5th generation AI release, the quality of loans offered still follows the general state of the business cycle. Deterioration of loan quality = Deterioration of business cycle.

Chris
Chris
Sep. 26, 2019 1:01 am

Basically they are afraid of the state laws and the AG of each state. i know TX was one of the grey area ones this full time. I am guessing they decided to pull out before they had legal issues.
And this my friends is why the rich get richer, government….

William
William
Sep. 26, 2019 6:04 am

My first thought was some sort of law change – but I searched for law changes in FL re peer-to-peer lending and didn’t see anything, so I suspected a financial motive. Either way, they are offering NO transparency and NO timeline. I’m moving my investment off the platform. Investors beware.

Heidi
Heidi
Sep. 26, 2019 7:35 am

I see some people saying they are pulling their money off the platform. To do this I would have to sell all notes on the secondary platform right?

What is really strange is I am in AZ and get emails, even since this announcement, trying to get me to refinance my auto loan with Lending Club! So I can borrow but not lend here?

Peter Renton
Admin
Peter Renton(@peter)
Sep. 26, 2019 7:41 am

The rumors I have been hearing is that this is a legal issue, as many here have surmised, and that it will be temporary. But it has proven difficult to get more information than that. I am not sure why LC is leaving everyone in the dark and I think, as Ryan said in the article, this is a bad way to treat their loyal investors.

Heidi
Heidi
Sep. 26, 2019 8:07 am

I searched for legislative changes in AZ affecting peer to peer lending and I found this…although it is for new companies in the arena testing maybe they are making Lending Club go through the application process too?
Fintech Sandbox Program Amendments (HB 2177)

Current Arizona law [A.R.S. § 41-5601 et seq.] established a regulatory sandbox program permitting limited access to the Arizona market to test innovative financial products or services without licensure or other required authorization. Subject to certain restrictions, products or services regarding most types of credit-extending services, such as peer-to-peer lending and online marketplace lending, as well as money transmission and investment management, would be eligible. Applicants for entry into the program must demonstrate that they have an adequate understanding of the innovation and a sufficient plan to test, monitor and assess the information while insuring that customers are protected from a test’s failure, and the Arizona Attorney General must accept and review each application. Upon approval, the participant has two years to test its innovation.

HB 2177: (i) clarifies that a person who holds a license for a regulated financial product or service must file an application for innovations outside the scope of that license; (ii) clarifies that program participants are not subject to agency licensing requirements that would or may regulate the innovation; and (iii) allows program participants to request an increase in the cap on the permitted maximum number of consumer testers.

William
William
Sep. 26, 2019 8:10 am

You could try that. I have been liquidating my non-qualified portfolio on this platform for the last several years. I tried selling some of my notes on the secondary market – sold some – but not even close to enough. So I just let the notes come to term and siphon off the cash every so often. For my qualified portfolio, I will set up a monthly distribution of all cash available and move it to another qualified plan within the allotted 60 days. I got out of the non-qualified part of the platform due to tax treatment of the notes – long term capital loss for write-offs and ordinary income for interest. I was netting less than 1% due to tax treatment (I have way more than the 3K allowable write-off of long term capital loss against income, so that tax treatment was making the non-qual investment very unattractive). Qualified was insulated from that tax treatment and I was satisfied with its performance – right up to the point that Lending Club shut down the ability to re-invest in new notes and are offering absolutely no explanation. Once trust is gone, it is gone – and that’s exactly how you lose investor trust.

Heidi
Heidi
Sep. 26, 2019 9:22 am
Reply to  William

I am very new to this. Just started last spring. Is there a good place to go for advice on selling on the secondary market? Right now I have invested $80,000 over about 3 months and the account is worth $81,650 after interest and adjusted for past due notes. My annualized return at this point is 10.48% so I have been happy with my results…although I know this could change. I just don’t know if I should be worried that there is something going on that would put my entire investment at risk.

William
William
Sep. 26, 2019 9:27 am
Reply to  Heidi

I am a long term investor on this platform. Beware the tax treatment if your investment is non-qualified. At one time I had over 300K invested, but at that amount and with the tax treatment, I was netting about 1%. I have since been systematically pulling out of the non-qualified investment. I tried selling on the secondary market, but with the number of notes I had it was extremely cumbersome and not very effective. I sold some, but nowhere near my investment. That interface is awful to work with – at least it was. Now, LendingClub has, without explanation, suspended the ability to invest in new notes for my state. I have called and they will not give a reason, or a timeline. Total lack of transparency, so, today, I put in the paperwork to move my qualified investment off their platform. They have lost my trust.

QVP1
QVP1
Sep. 28, 2019 11:04 am
Reply to  Heidi

Your real APR is significantly lower than that. Lending Club and Prosper are no longer investable. At one time, the returns were worth the risk and hassle, for a very small portion on your portfolio, but those days are long gone. I stopped buying new loans a couple of years ago, and I continue to withdraw as the cash balance accumulates. I’ll be very happy when the last loan completes and I withdraw my last penny. 🙂 Oh, and don’t waste time trying to sell loans. You’ll just reduce your APR further. Let the loans run off and you’ll be out in 5 years. 🙂

Rob L
Rob L
Sep. 29, 2019 9:23 am
Reply to  Heidi

IMO it’s pretty unlikely but not impossible that LC individual investors could lose their entire investment.The biggest risk is simply the next recession, whenever it happens, and its affect on charge off rates. LC started business after the GFC so marketplace lending has never been through a recession. There’s no precedent and no one knows how bad it could get but it’s likely individual investors would experience negative returns.The magnitude of the losses would depend on the tranche(s) owned; A, B, C, or D.

In the unlikely event of the bankruptcy of LC there are mechanisms in place to protect investors that own Notes. How well these would work is open to debate. Notes are NOT the ownership by investors of portions of the loans themselves but are IOU’s from LC to the investors and are liabilities on LC’s corporate balance sheet. The loans themselves are assets on the LC balance sheet that offset these Note liabilities one for one. In bankruptcy should the judge rule that the loans backing the Notes are not exclusively for Note holders but are assets like any other to be divided up among LC creditors then the Note holders would take a big hit. LC has made every effort to set itself up to prevent this from happening but who knows if it’s air tight and what a bankruptcy judge may do. Many think this possibility is so unlikely as to be in lumped in with conspiracy theories about JFK, fake moon landing or aliens at area 51. Probably not quite as crazy as those.

I recommend logging in to the forum and searching for threads on these themes. They have been discussed widely and a full diversity of views can be found there.

Heidi
Heidi
Sep. 29, 2019 9:42 am
Reply to  Rob L

I think if they were in jeopardy of going bankrupt they would have stopped trading in more than a few states. I think this does have to do with some changes in regulations in those states. I found something about it for my state AZ but it was for companies wanting to enter this field so maybe they had Lending Club go back through the application process as well. I am still putting all notes I can on the Folio market. It will be interesting to see what sells. I put only a few out the first day to make sure I was doing it correctly. I sold 5 out of 20 in a couple of days with a 3% mark-up

William
William
Sep. 29, 2019 10:24 am
Reply to  Rob L

I doubt they are facing bankruptcy. Not impossible, but I suspect it’s a legal concern. I know Google has a stake in LC, not sure how much of a stake but it is material.

QVP1
QVP1
Sep. 29, 2019 2:33 pm
Reply to  Rob L

Of course anything is possible, but the chances of a total loss are very slim. We have seen this movie before. I started with Prosper 1.0. Lots of bad things were going on at once… Prosper essentially had no underwriting at all, the SEC eventually shut them down, and the rest of the financial markets were crumbling. Even during that period, loans were still serviced and most of them kept current. Yes the charge-off rate was high, but the losses were still very minimal.

I’m not really expecting any losses in the future, just very poor returns that don’t justify the risk or the bother of continuing.

Rob L
Rob L
Sep. 29, 2019 4:04 pm
Reply to  QVP1

I freely admit that the chances of total loss are so exceedingly small that, except for some hugely fraudulent Enron style event, are all but nonexistent. The chances of an LC bankruptcy are also quite small but would not result in a total loss.I only mentioned the bankruptcy thing for the benefit of investors that might have the mistaken idea that they owned something other than an LC IOU. They do not.

My current opinion is that LC is not a failed or bankrupt business model but one basically treading water, staying afloat, and will move heaven and earth to continue to do so. Take a look at the latest quarterly report. Stock based incentive compensation of corporate management was $84 million dollars over the past 12 months. Not exactly in the best interests of management to let the ship go down, even if they aren’t profitable per GAAP.

I owned D & E notes underwritten by LC in 2016, lost money, and there was no recession. My guess is that many investors in a reach for yield are buying some C’s and even D’s today. IMO that in a recession these will lose money; and returns of A’s and B’s will be pretty lousy. If/when the next recession isn’t knowable.

In the spirit of full disclosure I’m not exactly an LC fanboy. You might have gotten the idea from my posts 🙂

Sam
Sam
Oct. 7, 2019 7:42 am
Reply to  QVP1

I actually stopped my automatic contributions and have been slowly letting withdrawing my payouts as well. The NET annualized return is calculated on your total time with lending club and does not give you an accurate picture of the health of your portfolio now. I pretty much have been running a slim gain to loss for the last 2 years, even though my NAR says I am at 4.8% This year I am -.05% on my portfolio due to the number of chargeoffs. — Last year I think I made .05% Because my portfolio is not as large as it once was, i guess overall LC still thinks I am doing well, hence my NAR actually is going up! .02%

JD
JD
Oct. 18, 2019 4:50 pm
Reply to  Heidi

Actual returns are much less than early reporting suggests. Although I still have qualified and non qualified accounts at LC I have been disappointed with management and somewhat deceptive practices. I like the diversification provided by this asset class but The company has just been very poorly managed. I am liquidating my non qualified account over time. Will make a decision on qualified account within the next week or so depending on how the company deals with this issue. The lack of information is alarming. Not worth the risk and illiquidity if this is now they treat their retail investors.

Brian Wolfe
Sep. 26, 2019 9:25 am

I think this is related to security registration issues. Normally when blocks of states are excluded from participating in the primary market on LC, it’s due to some security registration issue. That said, I talked with the Florida security registration office and they have yet to give me a straight answer if that’s what’s going on. See our blog post on retail investor restrictions on P2P platforms if you want to learn a little more https://sites.google.com/site/swimwolfe/p2p-borrower-and-investor-legal-restrictions

Jen A
Jen A
Sep. 26, 2019 11:09 am

I’d started pulling my money out of Lending Club last year due to platform risk – they had some “quirks” (read: lies) in how returns were being reported, and when I asked them about it, they told me it was “working as intended” (for the curious: the notes that they looked at for a given portfolio when calculating ‘amount invested’ were a subset of the notes being looked at for calculating ‘payments received’, causing the ROI to look better than it really was). There were some other smaller bugs floating around that hinted at a mess of a codebase (different views of loans having different, though eventually consistent, information about payments and status; about .5% of all notes weren’t sellable on folio for unknown reasons, etc) and no real focus on data accuracy. For me, that’s a red flag for a financial company.

Now seeing this change, I’m glad I only have a few hundred dollars left in the account (waiting for the remaining notes to finish up over the next year). Makes me think that investors might find themselves frozen out of doing anything without warning.

Heidi
Heidi
Sep. 26, 2019 3:41 pm
Reply to  Jen A

Okay…now I’m very concerned! I have a lot of money (for me) in these notes. There is no way I’ll be able to get out of all of them and most have close to 3 years left on them. Not sure what to do now. I guess I’ll try to sell on the secondary market.

Bryan
Bryan
Sep. 28, 2019 11:10 am

I’ve started to liquidate my account. Lack of communication and there still charging for fees but not offering any services.

Frankie
Frankie
Sep. 29, 2019 9:23 am

OK,I’m in an affected state. I’m on the mobile app and I have about $1500 invested. The mobile app does not work anymore. Is there a way to pull out my money as it comes into my account? Do I need to visit the website to do that?

Heidi
Heidi
Sep. 29, 2019 9:36 am
Reply to  Frankie

You will need to log in to Lending Club on your computer and click on Invest at the top of the page, then trading account, then go to the note trading platform. If you aren’t already set up for folio investing you will have to request this through a link on this page. If you aren’t already approved it takes about 3-4 days to get approved to buy and sell on the folio trading account. I googled selling on Lending Club Folio account and read some blogs by people who have done this for recommendations on how to sell, mark-up, mark-down etc.

Barry Davis
Barry Davis
Oct. 5, 2019 7:56 pm
Reply to  Frankie

The mobile app stops working because you cannot access the primary market anymore. You have to go to the website. From there you have to enroll the the Folio Investment Platform aka the Secondary Market.

I have a large investment and was in it for the long haul. The secondary market is more work that just picking the loans you want from the primary market. You have to buy loans that are already issued. You can’t buy into any new loans that are in funding.

I purchased some loans and put some late loans up for sale to see what happens. I may do what the other are doing and let this investment self liquidate over the next 5 years.

William
William
Sep. 30, 2019 12:10 pm

OK – something just isn’t right. This does not pass the “smell” test at all. I have over $300K invested in LC’s platform, and have asked for a senior person to call me and explain why they have taken the actions they’ve taken. Crickets. I have explained that I am liquidating my account because they have lost my trust, and investor trust, once gone, cannot be regained. They have sent a message to me, screamed it actually, that they do not want my money on their platform. Something is up. The attitude I’m presented with is too casual,

Mike
Mike
Sep. 30, 2019 12:18 pm

Same here. I have over 100k invested, they won’t tell me anything. But my defaults right now are about 3x what they normally are. I don’t know if that is coincidence or not, but it makes me wonder.

I’ve been buying and selling both primary and secondary market for years. The secondary market-purchased notes always have a higher default rate. So telling me I can only buy in that market may even leave me upside-down overall.

I started pulling money out of Prosper when they got rid of Folio some time ago. Since then, my annualized return is only 2.35%. Hardly worth the risk.

Sigh. Seems like time to find something new to invest in.

Justin
Justin
Sep. 30, 2019 2:04 pm

I will be withdrawing my funds and putting into something else as payments come in. This is absolutely ridiculous. The lack of information is what has me the most upset.

Tim
Tim
Oct. 2, 2019 8:39 am

Nuts, I hate this. LC has been a decent way to get a stable return above fixed income rates, and has helped diversify my portfolio. Their lack of transparency on what’s going on bothers me a lot. I might go to secondary market, but at least for now I’m withdrawing cash as it accumulates, and will re-invest somewhere else. It doesn’t look like I can turn auto investing off anymore, and at this point I don’t want them to quto invest immediately if they open up again in my state.

Fernando
Oct. 3, 2019 11:30 am

I have several family accounts in Texas & Florida affected, total of approx. $150k. I did find a company preparing for a Reg A+ offering, http://www.markitlend.com, with their fund audited by PricewaterhouseCoopers, with almost 7% p.a. return and very low volatility, great risk adjusted return or Sharpe Ratio. All performance and audit reports posted on their website. All of their fund notes are procured via LC, but since legal domicile Delaware, good to go.

David Pollard
David Pollard
Oct. 3, 2019 12:05 pm

Been with Lending Club for about five years, and the past couple of years have been yielding about 5.5% net. Not spectacular, but better than a savings account. I also own a few shares in the company. I noticed at their last quarterly report that they are now at a point were only about 5% of their notes are financed from the peer-to-peer individual realm. I’m guessing this is just a way to “phase us out” of their company and focus on getting their funds from institutional investors.
Kinda sad, as this is a complete 180 – from where they were when this started.

William
William
Oct. 3, 2019 7:03 pm
Reply to  David Pollard

That could very well be. I was worried when the institutionals started showing up (I was an early adopter of their platform, back when it was pretty much ONLY retail). I’ve suspected for some time that we’re getting the table scraps in terms of note quality anyway – although they’ve denied that when I brought it up in the past. I don’t approve of their way of doing this – if indeed that’s the goal – and the ill will it creates could come back to haunt them. But for us, it’s probably time to get off the platform rather than hang around and see diminishing returns.

Fernando
Oct. 3, 2019 12:09 pm

David, you should look at http://www.markitlend.com, audit fund by PricewaterhouseCoopers, PwC. We are between institutional & retail and currently working on filing a Reg A+ offering. If you want to chat, will introduce you to our CIO, Michael Sonenshine. Best investing, Fernando

Heidi
Heidi
Oct. 3, 2019 8:27 pm

Weirdly enough I received a survey from LC today asking if I would recommend their platform to others. I said absolutely not due to this issue and their lack of communication and transparency.

Joe T
Joe T
Oct. 14, 2019 9:30 pm
Reply to  Heidi

Same here

Coozbee
Coozbee
Oct. 4, 2019 7:14 pm

I’ve been preaching to investors for two years, about lending club and HOW they mal-FUNCTION. Consider it a BLESSING, to get your money back, if you can? RUN FOREST, RUN!!!! P.T. BARNUM
said it best. A SUCKER born every minute!

KateB
KateB
Oct. 6, 2019 3:17 pm

Here are my guesses after my own experience and reading a number of comments.

(1) Institutional investors increasingly edge out individual non-accredited investors. Remember when Lending Club started giving a certain group first access to certain notes? Their rejected notes would show up on the regular Platform (I actually tracked the ones I bought on the regular Platform when they did not fully fund, and these notes did rather well against regular Platform notes.)

(2) Various states likely are raising their requirements to both offer and invest in these types of notes, in part because of complaints by investors who paid little attention to essential lending parameters like diversity and risk. (These are the same people who contact lawyers when a stock they own-and ran up with their mindless buying-suddenly falls out of favor and out of the stratosphere.) Lending Club is probably addressing these requirements right now. Because Lending Club is a public company, they may be subject to more government regulation than Prosper (who to date has NOT put new limits on state residents.)

(3) I think already purchased and held notes will process normally. I am unconcerned about loss of capital due to new requirements-unless it creates moral hazard so that more of my note holders default than would otherwise.

(4) I have been having a problem finding the high quality notes I prefer for some time at Lending Club, and that may continue or worsen-or I may be in the group of people no longer allowed to invest on the Platform. Hopefully Folio will remain open to us.

(5) Lending Club has been very good to me. Their customer service has been exceptional. My opinion: Lending Club took advantage of terrible Obama admin. regulations intended to harm the banks, stall small businesses and entrepreneurs, and slow our economy. Lending Club provided an amazing opportunity for smaller borrowers and small investors. Naturally this attracted larger investors and institutional investors over time. Even Goldman Sachs jumped in and created their own version of online lending: Marcus.

(6) I don’t have a lot of sympathy for LC investors who didn’t pay attention to their selection of notes, didn’t bother to diversify, didn’t pay attention when the quality of borrowers took a dive, invested in the riskiest categories of notes with the idea of making a fortune on something they didn’t study and didn’t understand-and in the process of endlessly whining and screaming about their bad returns will wind up limiting this amazing class of investment to once again: accredited investors. This just gives the government(s) the excuse for restricting investment to the already wealthy.

Maybe I shouldn’t be surprised that my much smaller account at Prosper is outperforming the larger one at Lending Account by 1-1/2%. (I stopped buying notes at either about a year ago- although I may start buying again in the Prosper account – so the majority of the notes are 2-4 years old.) Since some people pay off early and some default, the Lending Club account is liquidating at a reasonable pace. I am putting proceeds into Fundrise, which has been paying approximately 8-1/2% for a few years.

Jeff
Jeff
Nov. 2, 2019 2:01 pm
Reply to  KateB

While you prop up Prosper, you might understand that those who were involved with LC before their ipo ; who did the same due diligence as a bank would ; that knew at that time AZ was excluded ;
we invested in this company, with reasonable returns relative to the market. Dont pretend to spin this to a new company of your benefit. I started with this company before many states were accepted. Saw them included around ipo; only to be excluded post ipo. Don’t pretend on a Prosper to do any better. Take your quick money and go away.

Fernando Sanchez
Oct. 8, 2019 12:48 pm

KateB, your response is excellent. I would like to pick your brain, I lead MarkitLend, http://www.markitlend.com. We have a P2P platform fund, generating almost 7% w/very low volatility, and annually audited by largest audit firm. Would love to discuss your experience to improve out product/fund.
Thanks in advance, Fernando https://www.markitlend.com/about-us/our-team/fernando-sanchez/

Kyle
Kyle
Oct. 16, 2019 5:54 pm

But everyone is failing to mention the generous $25 Amazon gift card we are getting for the trouble.
Granted even the amount of the Gift Certificate wasn’t disclosed at the time. Do you think they were embarrassed by the amount they were offering??

JD
JD
Nov. 2, 2019 6:51 am

I am a NY resident and cant let my a LendingClub account continue to accumulate cash. I am beginning the process of closing my IRA account with them. Two questions:
– I like the asset class. Suggestions for competitors that are better managed?
– Has anyone considered whether customers in my situation (and other states that have been excluded) have a legal claim for damages? Any lawyers out there that would be willing to consider whether a class action is viable?

Jeff
Jeff
Nov. 2, 2019 1:33 pm
Reply to  JD

The FTC just issued me a check; no submittal on my part. A Pittance. I am wondering if I might bother to cash. (Less than $20 on 40k) Think this an agreement with the company and the FTC; to help LC mitigate its losses. In another words “fell into bed” together.

Jeff
Jeff
Nov. 2, 2019 1:45 pm
Reply to  Jeff

Oh..and no credit from them on Amazon either in my postal mail or within Amazon yet after submittal 3 weeks ago.

Kyle
Kyle
Nov. 3, 2019 11:28 am
Reply to  Jeff

They said it would start being sent out in November. $25 for your spending pleasure.

Joey
Joey
Nov. 2, 2019 12:28 pm

This happened to me in Florida years ago (I don’t remember the exact year). LC turned off FL and told me they just had to get their license renewed every few years and that they were waiting on the government to sign off on it. A few months later FL was back. I have to assume this is a similar situation.

Jeff
Jeff
Nov. 2, 2019 1:41 pm
Reply to  Joey

I was with this Co. Before ipo. Query my responses.

JD
JD
Nov. 2, 2019 4:42 pm
Reply to  Joey

Thanks, Joey. But LC is not providing any insight on when the service will be back or the reason for the lockout.

Kyle
Kyle
Nov. 3, 2019 11:33 am
Reply to  Joey

How complicated is it to start that process BEFORE needing to “turn off Florida” ?

Seems like that would be an easy response for this time also if it was the case for the lockout but I doubt it is.

Doug
Doug
Nov. 11, 2019 9:58 am

I have been letting my LC notes expire to cash out for over two years. The default rates for retail investors have been excessive and the notes that default in the first 90 days has lead me to believe that the LC approval process is flawed. Fraud is definitely an issue on the retail side of their business. I’m in Texas so my access has been cut off but I’m happy to get off this platform.

I only discovered that investment was no longer available by logging in to the LC platform. There was no notification. What legitimate business behaves that way?

Peter Renton
Admin
Peter Renton(@peter)
Nov. 13, 2019 7:51 pm
Reply to  Doug

Just a heads up that the CEO of LendingClub mentioned this issue in the Q&A of their third quarter earnings call. He said this had to do with regulatory issues: As part of their prep for the bank charter they took an updated view of licensing requirements. Sanborn (the CEO) said they are working quickly to get it resolved.

More here: https://www.lendacademy.com/lendingclub-q3-2019-earnings-results-review/

Kyle
Kyle
Nov. 13, 2019 8:02 pm
Reply to  Peter Renton

Nice that he found it important enough to mention to stock investors but not the rest of the individuals that are involved. Thank you though for the information. It just reinforces my plan for the future with them.

Paul Oldakowski
Paul Oldakowski
Aug. 26, 2020 7:06 am

I live in North Carolina, where I can only invest in notes on the secondary market. Today, 26-Aug-2020, is the last day when even that can be done. “The secondary market for trading Notes is discontinuing…”. So it seems I’ll have to say goodbye to my Lending Club investments for now.

If anyone ever hears of any good news on either the secondary market front or the North Carolina front, would appreciate a comment below. Thanks!

Kyle
Kyle
Aug. 26, 2020 1:12 pm

Join the club. For many of us it’s been months. Just plan on regularly transferring your funds out daily or weekly as the loans are paid off. It will be a regular routine for you like brushing your teeth.
What goes around comes around…

Kyle
Kyle
Aug. 26, 2020 1:13 pm

Join the club. For many of us it’s been months. Just plan on regularly transferring your funds out daily or weekly as the loans are paid off. It will be a regular routine for you like brushing your teeth.
I wouldn’t expect changes anytime soon.