Lending Club update

Update to my previous post: Just in case anyone does click through on Lending Club, you’ll notice that they have an announcement up:

we will not accept new lender registrations or allow new commitments from existing lenders.

What does this mean? If you are an existing lender, nothing, but Lending Club is not accepting new lenders (and therefore there is no sign-up money). Since there is no further information about this action, I would check back later but in the meantime you can always sign up with Prosper or Revolution Money Exchange.

5 Replies to “Lending Club update”

  1. I don’t think existing lenders can bid on loans either. I tried to yesterday with existing cash reserves and nothing went through. I don’t know how they’ll be able to fund loans if they won’t let lenders bid on them.

  2. That’s alarming for me. I hope LC does not go down with our money 🙁
    I really hope that Prosper, LC and others are not pyramid schemes where you get paid to refer people and then the money is borrowed by P2P lenders themselves and paid out in bonuses to new members in order to attract fresh money from outside. At the same time the default ratio of loans increases…

  3. It sounds as though Lending Club is changing the way it processes loans (by issuing promissory notes as opposed to whatever they were doing before). So until the change is fully enacted, they’ve stopped processing loans.

  4. DGI: I don’t think they are running out of money because they have announced that they will be funding all loans by borrowers through the quiet period. It seems more like a change in regulatory model.

  5. Both Prosper and Lending Club have to register with the SEC. What they do can be considered a “security” (as legally defined). I can’t comment on why Lending Club has stopped taking no lenders while Prosper continues to take new lenders while both are undertaking the same regulatory compliance.

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