Questions and Answers: Lending Club Edition

It was a great trip out to San Francisco last week where I spent some time with Lending Club and Prosper. Before my trip I wrote this post asking for questions that you would like to pose to the management of both companies. Thanks to everyone who posted a question in the comments and for those who emailed me directly.

I ended up with a list of over 60 questions. Now, I didn’t have time to cover every single question but I tried to hit the most important ones.

Q. What efforts are being made to open up for investors in new states?

Lending Club indicated that they are expanding their legal team and will be putting more effort into this in future. They also said that some states have very challenging requirements and it will be nearly impossible to get approved in all states as things stand right now. However, while they made it clear this is not imminent, in the event of a Lending Club IPO there is a “blue sky exemption” that would allow Lending Club to open for investors in all 50 states when they are a public company.

Q. When I make an ACH transfer deposit at Prosper my money is available INSTANTLY for investment. At Lending Club I have to wait 4-5 days before I can invest. Why is that?

Lending Club is working on having some kind of instant transfer available. This is a high priority and one they realize they need to offer to be competitive.

Q. When will Lending Club introduce an API?

The Lending Club API is in beta mode right now and is currently being tested by several institutional as well as retail investors. There is no firm date for a release.

Q. Does Lending Club have any plans to introduce 1 year notes?

No.

Q. When will Lending Club offer the ability to sign in to multiple accounts with one email address?

This is a major project that is in progress. It is a significant change to the architecture and it will be a major upgrade to the site when it is implemented. They would not give a timetable other than to say it is a high priority for the development team.

Q. I would like to know if there are any plans for a major FolioFN makeover – it really, really needs some better filtering and sorting tools… really badly. It’s terrible.

When I asked this exact same question about FolioFN over a year ago they did make some minor changes. But they agree the trading platform as it stands today is not very friendly to investors. Enhancements to FolioFN is a project that is also in the queue but again they would provide no timetable. They did say this, though. They have recently hired a new Chief Technology Officer (CTO) and one of his priorities is greatly expanding the development team – this should lead to changes happening faster in the future.

Q. I would say a major change that should be implemented is a net gain/loss metric either instead of the total interest paid or get right of the total interest paid on the main page completely. It’s very misleading to investors that have had a few defaults.

It is a good idea. When the change for linking multiple accounts is implemented there will also be a change to the main accounts page to provide more useful information for investors.

Q. I’d like to review available notes and mark some as Recheck later, or hide permanently, or whatever.

This is not high on the priority list.

Q. Why is the web user interface of LC so mediocre and so stagnant? Why isn’t it a work in progress with ever increasing Web 2.0 goodness?

The CTO agrees that the user interface could do with some updating. This will definitely be included in one of the next upgrades to the site.

Q. Does LC have any plans to increase maximum loan amounts for certain well qualified borrowers to a higher amount such as $50k?

Not for a first loan. But recently they allowed borrowers to take out a second loan so the total in loans can now be $50K.

Q. I Would like to see better transparency on what is happening with payments and collections.

I was not able to speak with the collections manager when I visited but this is a question I hear a lot. So I have organized to speak with someone there soon and will have a detailed post about Lending Club collections out in a couple of weeks.

There you have it. This probably doesn’t satisfy everyone but at least many of these issues are now in the forefront of the minds of Lending Club management. Now, we will see how long it takes to implement what was discussed.

  • 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.