CommunityLend blog » regulation

LendingClub announce registered broker dealer partnership

Colin Henderson — Tue, 14 Oct 2008 15:04:55 +0000

Lending Club have come out of their quiet period with an astounding announcement for themselves and social lending.

Today, we’re delighted to announce that we have completed this process and are now available to both borrowers and lenders. We believe that this SEC registration is a major step forward for the Lending Club community and social lending in general, as it helps establish the space as a investment alternative to the traditional debt instruments and credit products offered by large financial institutions.

Much of this remains to be digested, but the immediately obviously novel parts are:

Partnership with FOLIOfn Investments, Inc.,
On the trading platform, lenders who become customers of FOLIOfn will be able to put notes up for sale in the event they need liquidity before the completed term of a note.

Clearly social lending is undergoing consequential changes and shifts that will determine ultimate viability, and LendingClub are leading the current next wave with securities regulation under their belt and apparently unlimited access to lenders and borrowers.

Not so good news, and some great news | Zopa

Colin Henderson — Thu, 09 Oct 2008 19:26:27 +0000

It is a little sad that we see Zopa US close shop apparently following the participating Credit Unions inability to adequately fund the loans. We had always known the US Zopa was an entirely different model, with the Credit Unions being the sole lenders, and then the credit crisis came along. Nonetheless we will miss them.

Zopa US

So while our model is doing very well in current market conditions, the US has been adversely affected in a way that just couldn’t have been predicted when we launched in the US and is no way the fault of our partners. For us, a real shame is that we weren’t able to launch the original model over there for regulatory reasons.

On a related not Zopa UK is showing double digit increases in volume since the credit crisis hit, reflecting all our belief, that the time is ripe for consumers who are seeking financial alternatives.

P2P lender Zopa reports soaring uptake as credit crunch bites | finextra

Zopa says that between July and September an average of 3700 borrowers joined per month, compared to 2500 a month in the previous quarter.
Explaining the surge, Sarah Kennedy, head, customer proposition, Zopa says: “Clearly the tightened lending criteria at the banks is helping to drive borrowers to look for alternatives.”

LendingClub file revised S-1; suggests progress being made

Colin Henderson — Tue, 05 Aug 2008 04:50:31 +0000

LendingClub has filed a revised S-1 with the SEC. This suggests progress, and will be as a result of comments on the original S-1. Comments from the SEC are not public until final approvals.

www.sec.gov

As filed with the Securities and Exchange Commission on August 1, 2008

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

to

Form S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

LendingClub Corporation

TechCrunch reports on Lending Club

Colin Henderson — Wed, 09 Apr 2008 04:01:28 +0000

Very clear quotes from a lawyer quoted on Techcrunch. They also ask the question, as to how these SEC regulations will apply to others in US. No doubt we will hear more over the next while.

Lending Club Puts Hold on Lending Activity While It Sorts Out Some Legal Issues

… … its borrowing practices could be interpreted as the sale of securities, which requires a license Lending Club doesn’t appear to have.This suspicion has been reinforced by Veronica McGregor, an attorney with the law firm Perkins Coie. She says that “it looks like they are getting themselves a license to buy and sell securities.”

These are issues that other P2P lending sites – such as Prosper, Virgin Money, and Zopa – will have to face if they haven’t already.

For our readers here in Canada, CommunityLend is working closely with the applicable Canadian regulators, and has been for over 9 months now. This was highlighted in this recent piece from the Toronto Star.