LendingClub Anti-Money Laundering: Too far?

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money launderingPerhaps as part of wider governmental banking pressure, p2p platform LendingClub has instituted a new controversial Anti-Money Laundering policy. The new rule is that you can only connect your investment account to 1 bank account for deposits. This isn’t a technical limitation since as of recent, you could update your bank information at any time. I regularly made deposits to LendingClub from 2 checking accounts but no longer can I do this.

What’s even weirder is that if you moved from 1 bank to another, you can’t even update the new correct information. You’re cut off. In such a situation, LendingClub offers a high tech alternative, mailing in a paper check from the new account. Why this is more acceptable I do not know.

In my call to LendingClub to complain, they were adamant that all such restrictions were necessary to prevent money laundering. Recalling the discussion now, I think the investment services rep used the term money laundering more than 20 times. Realizing that they wouldn’t budge, I asked if I could update my account information just one last time so that it reflected my main checking account. The answer was ‘no’, due to possible money laundering of course.

anti-money laundering policy

So what do you do if you changed banks?
LendingClub said fear not, at regular specified intervals which they cannot reveal, they will allow you to update your banking information. So if you need to update your account info, all you can do is check every day to see if the ban message has gone away. Only then can you update. Better make it a bank account you plan to use for the long haul.

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Could the move be due to governmental pressure in the banking and lending markets? I suspect it is.

Last modified: July 16, 2014
Sean Murray


Category: banking, merchant cash advance, MPR Authored, p2p lending, peer2peer lending

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