Lending Club falters
Almost three years ago, I wrote about taking on a debt consolidation loan with Lending Club. I’ve been keeping a sufficient balance so that they can withdraw payments on schedule, and I should be able to payoff on schedule, then retire. But Lending Club has been sending me an increasing stream of email and paper mail offers to take on even more non-collateral debt. I figured these were mostly computer-generated, but some of them bothered me because they used the Open Immediately! style of mailer, with no identification on the outside. That sort of marketing tends to associate Lending Club in my mind with dicey outfits like Embrace and American Debt Mediators.
Today I ran across a disquieting CNBC article, Lending Club shares tumble after CEO resigns:
Shares of Lending Club plummeted 25 percent at the open Monday morning after the company said co-founder Renaud Laplanche had resigned as chairman and CEO.
Laplanche’s departure comes as Lending Club acknowledged it conducted an internal review of its business practices. The investigation also led to the firing or resignation of three senior managers.
The company’s executive leadership said the review of loans discovered staff knowingly sold $22 million in loans in March and April 2016 that did not meet the buyer’s requirements. It came after an unnamed staffer made a change executives described as “minor” to internal loan paperwork. …
The company said it would bolster internal controls after the sale of what it called $22 million in “near-prime” loans, and also revealed it would suspend providing the market guidance.
I don’t suppose this will affect me or my microloan investors, but now I have to wonder if I am near-prime, or just past-my-prime.