LendingClub Bank Acquisition Approved by OCC as Investor Platform Closes Down

The last day of the year is normally pretty quiet as far as news goes but LendingClub had two major developments on December 31, 2020.

First, as announced in October, the retail investor platform for LendingClub closed down. The last day to invest in new notes was December 27 and the retail platform officially closed on December 31. It was a sad day for me as I have been investing since 2009 and this marked my initial foray into fintech. The reason for the shutdown is because of the acquisition of Radius Bank. Which brings me to my second piece of news from December 31.

We learned that the OCC approved LendingClub’s acquisition of Radius Bank on December 31, although the seven page approval was officially dated December 30. The news sent LendingClub’s stock soaring 26% on the last trading day of the year (it did lose some of that ground in trading today). Needless to say, this is a big deal. It means the leading bank regulator has given the green light for the merger, an essential step for the acquisition to complete. Now, LendingClub still needs to get approval from the Federal Reserve to become a bank holding company but if and when that happens LendingClub Bank, National Association will be the new name for Radius Bank. So, it was a good end of the year for LendingClub.

Now, as for LendingClub individual investors we are starting to see a cash build up in our accounts. We have not heard anything yet on the Founder Savings account that was promised when they announced the shutdown. This will be a high yield savings account that can sweep the cash from the LendingClub account on a weekly basis. I reached out to LendingClub today for more information on this and they said there is no update yet.

I still remain optimistic that LendingClub will eventually offer range of good investor options but as each day goes by now with no news on any new products they risk losing whatever investor goodwill they have generated over the years.

  • Peter Renton is the chairman and co-founder of LendIt Fintech, the world’s first and largest digital media and events company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series. Peter has been interviewed by the Wall Street Journal, Bloomberg, The New York Times, CNBC, CNN, Fortune, NPR, Fox Business News, the Financial Times, and dozens of other publications.

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