P2P Forum

Lending Club Discussion => Investors - LC => Topic started by: bcartpa on May 31, 2016, 11:00:00 PM

Title: Email from Lending Club
Post by: bcartpa on May 31, 2016, 11:00:00 PM
Just got this email from Lending Club about 30 minutes ago.  Looks like a pretty strong statement of commitment to retail investors.


Hello ______,
 
I wanted to check back in.
 
Some of you responded to my first email with a note about your continued support; others of you are talking to our Investor Services team to get your questions answered.
 
The most common question we're getting is this: Are we committed to individual investors?
 
Emphatically, yes.
 
You're the heart of our marketplace.
 
We started Lending Club with the simple but revolutionary idea that we could democratize access to consumer credit. That idea - and our commitment to it - will never change.
 
Our mission is to make people's lives better. That's true for borrowers - helping them get access to responsible credit - as well as investors. We want to help you build your financial future.
 
You've always been the foundation of our marketplace. You helped us start Lending Club in 2007; now our individual investor base is over 150,000 members strong. We've also improved the platform based on your feedback. We created Automated Investing, simplified the IRA investment process, and integrated our platform with TurboTax.
 
We're doubling down on our efforts to serve you. We're staffing up on our Investor Services team and are eager to connect with you to see how you're doing. We're also dedicating more engineering resources to you to ensure you have a great investment experience.
 
We want your ideas on what else we can do.
 
To prove our commitment and thank you for investing with us, we're offering a bonus for new funds transferred to your account by July 15, 2016.1 The more you invest, the bigger the bonus you could receive.

$5,000 - $9,999 - bonus $100
$10,000 - $24,999 - bonus $200
$25,000 - $49,000 - bonus $500
$50,000 - $99,000 - bonus $1,000
$100,000+ - bonus $2,000
 
In the meantime, keep your ideas and questions coming. Our Investor Services team is here to help.
 
Sincerely,
 
Scott Sanborn
Lending Club President & Acting CEO
Title: Email from Lending Club
Post by: RT45 on June 01, 2016, 11:00:00 PM
I did not receive this email. Do you think they are sending out based on $ amount invested? What type of account did you have?
Title: Email from Lending Club
Post by: TravelingPennies on June 01, 2016, 11:00:00 PM
from: RT45 on June 02, 2016, 02:16:17 AM
Title: Email from Lending Club
Post by: hessinger on June 01, 2016, 11:00:00 PM
from: bcartpa on June 01, 2016, 10:02:42 PM
Title: Email from Lending Club
Post by: avid investor on June 01, 2016, 11:00:00 PM
I got it, too.  Could easily have been triggered by my changed behavior.  I have turned off all 5 of my daily auto-investing cron jobs, which invest in all 4 accounts.  Haven't invested for at least a week.
Title: Email from Lending Club
Post by: fliphusker on June 01, 2016, 11:00:00 PM
from: hessinger on June 02, 2016, 09:43:48 AM
Title: Email from Lending Club
Post by: Boatguy on June 01, 2016, 11:00:00 PM
from: fliphusker on June 02, 2016, 01:43:25 PM
Title: Email from Lending Club
Post by: bobeubanks on June 01, 2016, 11:00:00 PM
from: Boatguy on June 02, 2016, 02:09:20 PM
Title: Email from Lending Club
Post by: .Ryan. on June 01, 2016, 11:00:00 PM
I've stood by LC throughout this whole ordeal, and kept reinvesting all payouts.

I'll be pretty disappointed if I don't receive the offer. Not a good way to reward the ones that supported LC through the past few weeks.
Title: Email from Lending Club
Post by: TravelingPennies on June 02, 2016, 11:00:00 PM
from: .Ryan. on June 02, 2016, 11:24:08 PM
Title: Email from Lending Club
Post by: nmay2k on June 02, 2016, 11:00:00 PM
I believe this offer is for non-IRA accounts, so if that is the only account you have that could explain why you did not see the offer.   

I am sure if you were about to transfer $5000 to your LC account to invest, you can call them and ask about the bonus. But I suspect they already emailed the folks most likely to do so. For example, if you pulled $5000 out in the last month, you may not be on the DL. 

I am definitely thinking about this one.
Title: Email from Lending Club
Post by: DLIFVOIP on June 02, 2016, 11:00:00 PM
from: Boatguy on June 02, 2016, 02:09:20 PM
Title: Email from Lending Club
Post by: SLCPaladin on June 02, 2016, 11:00:00 PM
I received this email yesterday as well. Here are my thoughts:

1. This offer is certainly better than a sharp stick in the eye, but it essentially skirts the issue that, I believe, is top-of-mind for most retail investors. I actually quite appreciate that there is some sort of enticement to lure back skittish retail borrowers. It shows that management is actively trying to reach out. What's more, adding 2% to my yield is nothing to sneeze at. But at the end of the day, like many on this forum have pointed out, the offer doesn't address the fundamental issue of no BRV being in place for the retail investor. When I analyze my own financial situation, this is still the overarching concern which prevents me from returning to buying loans. As great as this 2% may be, the "unknown unknowns" (it's the uncertainty, stupid) of what my notes would look like if things get ugly fast outweighs a 2% bump in yield. That is how I see it, anyway. Others may feel different, or have a different risk tolerance.

2. While this may not lure me back to reinvesting, let alone incite me to deploy large amounts of new capital, hopefully this carrot is sufficient for enough retail investors to prevent a massive funding shortfall that creates a further self-defeating crisis of confidence. Let's face it, what we're essentially dealing with is a classic run on the bank, or crisis of confidence. I don't think there are any major systemic issues (although I could be wrong) that suddenly went into play a few weeks ago. If all institutional investors and retail investors suddenly decided to start reinvesting all at once, then the RL affair and all the drama that it entails would be a blip on the radar screen. What we are dealing with is a crisis of confidence. The FDIC is in place to prevent bank runs. A BRV is the type of vehicle that is needed to prevent a crisis of confidence for some segment of retail investors. When all is said and done, this RL debacle could turn out to be a blessing in disguise in that it awakens the board and upper-management to the need to think long and hard about funding sources in crises situations. When Mario Draghi promised to "do whatever it takes" to stop the Euro-zone crisis, it had the intended effect of stopping the panic and prevented the ECB from doing a lot more. Mr. Sanborn needs to heed lessons from the past 8-9 years and come out with what is effectively bazooka, not just an enticement to pad returns. In a panic, investors are more interested in return of investment than return on investment.

3. I don't see what is happening behind the scenes. I don't know what the temperature is among other retail  investors, or what funding shortfalls may, or may not, exist. It may very well be that many retail investors are somewhat oblivious to what has transpired in the past few weeks and are reinvesting as if nothing ever happened. I may be a minority voice, I don't know for sure. If this is the case, then the 2% enticement may essentially do the trick. LC has all the data on their investors and they can measure the impact of their communication and offer. If this is enough to right the ship, then maybe LC is right to focus on the silent majority and not the vocal minority. If, however, this forum is a proxy for a wider cross-section of LC investors, LC may need to rethink their approach to shoring up confidence.
Title: Email from Lending Club
Post by: TravelingPennies on June 02, 2016, 11:00:00 PM
Quote
Title: Email from Lending Club
Post by: TravelingPennies on June 02, 2016, 11:00:00 PM

1. about BRV, if prosper has it then go there. I am not sure there is any reason to start BRV at LC. If you want a burger, go to the burger joint.

2. This is not a run on the bank (especially if you don't think there are any systemic issues). Like stocks, these are not FDIC insured and everyone was fully aware of the risk when investing so no need to change the rules in the middle of the game. You want FDIC insurance go to the FDIC insured joint.

3. All LC needs is more retail investment. This is our queue to step-in the game and show them what we are made of. Do we believe in the p2p model or not? Do we believe in it only if it is insured against loss? Do we believe it whether there is a 2% bonus or not?

4. I don't think retail investors should be second class to institutional investors. Institutional investors have bank charters and can lend money out themselves, but they are too lazy to do it can conveniently mooch off LC. They get the tax breaks we don't on the same returns. Why should we be the second class citizens here? We are the p2p, we are the ones paying the premiums (taxes) to use this. We are the ones picking the loans 1 by 1 versus using the robots. We are the one sitting down at the pc every 4 hours to invest in loans. We are the ones getting the lower class loans because we are not using the API to suck up the loans faster than you can say go. We are the foundation to this whole thing. Without retail, by definition there is no p2p.
Title: Email from Lending Club
Post by: lender90530 on June 02, 2016, 11:00:00 PM
I agree with you concerning the BRV. For those of us who do not want to take equity like risk on a startup without the potential for equity like returns, LC is a lousy deal. That's why I am moving to Prosper.
Title: Email from Lending Club
Post by: SLCPaladin on June 02, 2016, 11:00:00 PM
Quote"> from: nmay2k on June 03, 2016, 01:09:39 PM
Title: Email from Lending Club
Post by: Fred93 on June 02, 2016, 11:00:00 PM
from: SLCPaladin on June 03, 2016, 03:19:33 PM
Title: Email from Lending Club
Post by: rawraw on June 02, 2016, 11:00:00 PM
from: Fred93 on June 03, 2016, 04:07:26 PM
Title: Email from Lending Club
Post by: AnilG on June 02, 2016, 11:00:00 PM
In May, Lending Club new loan listings were down 40% on retail platform from April. Also, the retail demand was soft in May as suggested by higher number of average total loans on the platform. At Prosper new loan listings were up 6.8% on retail platform from April. The retail demand was also soft at Prosper. I posted the charts for monthly new listings and average total loans on platforms to my Twitter feed https://twitter.com/anilkg. This should give you a good benchmark how things are going on the retail platforms for Lending Club and Prosper at least. Based on the news reports and emails, it appears LC management is doing quite a few different things (making the right moves) to shore up funds for originations and trying to minimize using cash on its own balance sheet for loan originations.

Prosper has retail BRV. Prosper has never been about retail lenders since Prosper 1.0 days. It is more focused on institutions. Retail will always be second unless management changes focus. While LC management claims that allocation to whole and retail platforms are random, Prosper has never made such claims. Prosper also doesn't have strong enough secondary market. Retail tools on Proser platform are lacking  Shifting from LC to Prosper most probably not going to gain you much.

from: SLCPaladin on June 03, 2016, 03:19:33 PM
Title: Email from Lending Club
Post by: TravelingPennies on June 02, 2016, 11:00:00 PM
from: AnilG on June 03, 2016, 05:35:50 PM
Title: Email from Lending Club
Post by: sommers on June 03, 2016, 11:00:00 PM
Quote"> from: SLCPaladin on June 03, 2016, 10:24:32 AM
Title: Email from Lending Club
Post by: Rob L on June 03, 2016, 11:00:00 PM
Stand in line with the embarrassment thing.  I mentioned LC to my nephew a few years ago. We don't get to visit much as he lives on Long Island and I'm in Virginia. My Mom lives up there and I went for a visit in February. The subject of LC came up and the next thing you know I'm helping him get an account set up. Fast forward to May, he's just about fully invested and I have to make the call.. "maybe we should slow down on this a bit, the CEO's been fired by the BOD for not being "forthcoming" and, well, ..... ". My brother-in-law was always skeptical so it's egg on face time. It's a very small deal though. My brother-in-law and I are very close and I will personally guarantee my nephew comes out whole. Still... embarrassing! (And no, if you're thinking I might have gotten an incentive from LC for the reference. I didn't).

Meanwhile LC has done absolutely nothing since 5/9 to make me reconsider exiting the playing field. (I'll help my nephew do the same; with apologies to him and my brother-in-law).
Title: Email from Lending Club
Post by: RT45 on June 03, 2016, 11:00:00 PM
Same boat as you Rob L.

I feel like for every person on the forum, there is a 3-5x multiplier of people they talk about LC with.

In the previous era, LC was like an investment club where everyone could do it together and had a community aspect. Not so much anymore.

Title: Email from Lending Club
Post by: TravelingPennies on June 03, 2016, 11:00:00 PM
from: rawraw on June 03, 2016, 04:52:27 PM
Title: Email from Lending Club
Post by: TravelingPennies on June 03, 2016, 11:00:00 PM
@Fred93

https://en.wikipedia.org/wiki/Butterfly_effect
Title: Email from Lending Club
Post by: TravelingPennies on June 03, 2016, 11:00:00 PM
from: RT45 on June 04, 2016, 10:02:24 PM
Title: Email from Lending Club
Post by: nmay2k on June 03, 2016, 11:00:00 PM
Sure everyone was taken aback about the resignation and the backdating and sure they would probably try to handle that better given the impact by the way they handled it. LC has enemies and always did. The banks! The banks always bad mouthed them. They tried to partner with the banks sort of like Chamberlain..... but guess what, at the first opportunity these guys will pull a Julius Cesar. So, think of Citi who gets 18% on the credit card and lost this lucrative payment to LC who refies the loan at 13%. Do we really think Citi is going to lend a helping hand to LC? Do we think any bank with credit cards at 18% rate is going to help LC? Are the banks toasting LC's demise right now? Sure. Are they going to compound suspicion on LC? Sure.

But look at their actions rather than their moving lips. Is anybody really liquidating their LC notes? No, way. Sure hit the pause button if you want. More loans for the rest of us. But  no one is really pulling out. They just like to pretend that they are. They want some kind of concession, higher rates, higher security, higher bonuses or have LC evaporate from existence.

There are 16,078 $100 notes for sale on folio. The max markup is 15% and the max mark-down is -8.99%. (Funny to think that they might sell at a 15% mark-up). The median mark-up is 1.41% (half are above that and half are below that) and about 20% (3,200 notes) are priced below 0% mark-up and 6% (900) are priced below -1% mark-up. Amazingly 80% think they can liquidate without giving the buyer an incentive. First time I heard of a liquidation sale with prices above list. I suppose if you want to sell your equity stock quickly (as the market drops) just price it at 1.41% above the market price right?

LC is not going anywhere to the dismay of the banks. But if the banks can rob of rattle LC's retail investor, and even perhaps rattle the guy wanting to refi that 18% credit card payment, then all the better for them. I am not sure sitting on the sidelines is productive in any way. Either get out of the game (go to Prosper, go to Ally, got to a CD, go to the stock market which I really do not recommend) and help the banks take LC down or get in.
 
Title: Email from Lending Club
Post by: smihaila on June 04, 2016, 11:00:00 PM
I don't know why I get this odd feeling that you are actually an LC employee posting here?
Title: Email from Lending Club
Post by: fliphusker on June 04, 2016, 11:00:00 PM
from: smihaila on June 05, 2016, 12:17:35 AM
Title: Email from Lending Club
Post by: rawraw on June 04, 2016, 11:00:00 PM
Quote"> from: Fred93 on June 04, 2016, 09:06:20 PM
Title: Email from Lending Club
Post by: sommers on June 04, 2016, 11:00:00 PM
Quote"> from: Rob L on June 04, 2016, 08:10:38 PM
Title: Email from Lending Club
Post by: TravelingPennies on June 04, 2016, 11:00:00 PM
^Remember that LC is a public company and even if they are doing something to protect your position, they have to tell you and investors at the same time if its material. And then they are subject to litigation if something goes wrong.  So I wouldn't mistake their silence for lack of action -- we will see with time

Also, I don't suspect there is going to be a high correlation with subprime auto and prime unsecured lending.
Title: Email from Lending Club
Post by: TravelingPennies on June 04, 2016, 11:00:00 PM
from: rawraw on June 05, 2016, 06:53:19 AM
Title: Email from Lending Club
Post by: TravelingPennies on June 04, 2016, 11:00:00 PM
Yeah I understand, which is why I try to point them out. For example, we could all get a false sense of comfort from all that cash and then see they funded loans with it. Doesn't mean it's going to happen, but it should be considered when thinking of that protection. Which is why I said "it's not that simple"

Sent from my SAMSUNG-SM-G935A using Tapatalk
Title: Email from Lending Club
Post by: TravelingPennies on June 04, 2016, 11:00:00 PM
from: rawraw on June 05, 2016, 06:58:13 AM
Title: Email from Lending Club
Post by: TravelingPennies on June 04, 2016, 11:00:00 PM
from: rawraw on June 05, 2016, 07:05:50 AM
Title: Email from Lending Club
Post by: Peter on June 04, 2016, 11:00:00 PM
Quote"> from: Fred93 on June 04, 2016, 09:06:20 PM
Title: Email from Lending Club
Post by: TravelingPennies on June 04, 2016, 11:00:00 PM
from: nonattender on June 05, 2016, 07:14:02 AM
Title: Email from Lending Club
Post by: Fred93 on June 04, 2016, 11:00:00 PM
from: nonattender on June 05, 2016, 07:14:02 AM
Title: Email from Lending Club
Post by: TravelingPennies on June 04, 2016, 11:00:00 PM
from: Fred93 on June 05, 2016, 08:04:13 AM
Title: Email from Lending Club
Post by: fliphusker on June 04, 2016, 11:00:00 PM
Quote
Title: Email from Lending Club
Post by: mchu168 on June 04, 2016, 11:00:00 PM
For all of you scared away from investing in LC loans, please continue to stay on the sidelines.  I'm having a much easier time finding loans nowadays, and LC now seems to have more incentive to make the returns attractive for investors going forward vs. the days where any crappy loan was getting funded in 250ms.

As for the risks, I think well informed people can make their own judgement. I certainly didn't come here looking for deep insight and I haven't been disappointed.  It does boil down to a bull-bear debate for me, because as is always the case there are some who have negative biases on a story and some who see the glass half full.  If a newbie comes here and reads 50 negative posts from "bears" they will leave here with an unrealistically "bearish" view.  Thank goodness for Fred93 (a voice of reason among the herd).  Anyways, I think it's useful to understand posters' biases...

Title: Email from Lending Club
Post by: TravelingPennies on June 04, 2016, 11:00:00 PM
Quote"> from: bcartpa on June 01, 2016, 10:02:42 PM
Title: Email from Lending Club
Post by: TravelingPennies on June 05, 2016, 11:00:00 PM
from: fliphusker on June 05, 2016, 02:31:52 PM
Title: Email from Lending Club
Post by: SLCPaladin on June 05, 2016, 11:00:00 PM
Quote
Title: Email from Lending Club
Post by: AnilG on June 05, 2016, 11:00:00 PM
You are conflating price movement with change in yield when comparing utility stocks with LC. LC investment is not readily traded so there is no price movement. Most users are valuing their LC portfolio notes at remaining outstanding principal rather than the market value. As utility stocks are readily tradable, their price (market value) moves frequently and thus published yield. A fair comparison is when LC yield is compared with yield from utility stock at the time of utility stock purchase. Any price movement of utility stock and resulting change in yield after purchase is irrelevant when comparing with LC yield.

Without BRV, retail lenders are buying a junk bond from a "single" company (LC) or a borrower payment linked note whose counter party is LC and not borrowers. There are two components to risk of buying notes for retail lenders: The risk of borrowers not repaying and the risk of LC failing their commitment as counter party.

Instead of comparing with utility stock, a better comparison (still not perfect) for the LC yield is with that of junk/high yield bond from consumer financial services firms such as Ally and Capital One or even Junk/High Yield ETFs. I have seen some large retail lenders applying the price movement of such bonds to LC account value to figure out imputed value of their LC investment.

from: SLCPaladin on June 06, 2016, 01:12:29 PM
Title: Email from Lending Club
Post by: jz451 on June 05, 2016, 11:00:00 PM
This is my view also, that people need to think of LC in comparison to junk bonds/bond funds which are the most similar in terms of structure and level of risk.  Everything else is apples to oranges.


from: AnilG on June 06, 2016, 01:44:22 PM
Title: Email from Lending Club
Post by: fliphusker on June 05, 2016, 11:00:00 PM
Quote
Title: Email from Lending Club
Post by: Fred93 on June 05, 2016, 11:00:00 PM
Quote"> from: sommers on June 06, 2016, 05:07:11 AM
Title: Email from Lending Club
Post by: sommers on June 05, 2016, 11:00:00 PM
from: SLCPaladin on June 06, 2016, 01:12:29 PM
Title: Email from Lending Club
Post by: Rob L on June 05, 2016, 11:00:00 PM
from: AnilG on June 06, 2016, 01:44:22 PM
Title: Email from Lending Club
Post by: TravelingPennies on June 05, 2016, 11:00:00 PM
from: sommers on June 06, 2016, 07:27:40 PM
Title: Email from Lending Club
Post by: TravelingPennies on June 05, 2016, 11:00:00 PM
from: sommers on June 06, 2016, 07:27:40 PM
Title: Email from Lending Club
Post by: bobeubanks on June 06, 2016, 11:00:00 PM
from: sommers on June 06, 2016, 07:27:40 PM
Title: Email from Lending Club
Post by: TravelingPennies on June 06, 2016, 11:00:00 PM
from: fliphusker on June 06, 2016, 09:02:35 PM
Title: Email from Lending Club
Post by: TravelingPennies on June 06, 2016, 11:00:00 PM
from: sommers on June 07, 2016, 06:05:04 AM
Title: Email from Lending Club
Post by: TravelingPennies on June 06, 2016, 11:00:00 PM
Quote