Investors from both Texas and Arizona will be happy to hear that as of today, they can now invest in Lending Club. Previously, investors from Texas and Arizona could only invest in notes through the secondary market FOLIOfn, but now they will be able to participate in the primary market. Although secondary market access is better than no investing at all, investing in the secondary market can be a labor intensive process and might have often resulted in investors paying a premium markup for newly originated loans.
We reached out to Lending Club for comment today and spoke with CEO Renaud Laplanche this evening. He indicated that these new states were added as part of a continuing strategy to open up Lending Club to more investors. They became available to Massachusetts investors in December and now have added two more states to bring the total to 30 states. When we asked Laplanche about more states he said that they are hoping to add additional states before the end of the year. But it is a labor intensive process involving extensive dealings with state regulators one by one, so it is not a quick process.
There are still several states that still remain as shown in the below image from Lending Club. [Read more…]