Too small indeed. I just saw that the highest yielding NCUA CD is at 4% for a 5-year term.

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Ryan, you've articulated much of my own sentiments. I never invested in the secondary market because I always dreaded what the tax implications was since my own personal tax situation has been relatively simple and I didn't want to add complexity with having to account for cost basis on hundreds of notes. At one point my investment in LC was over 100k and I'm now down to about $30k including all accounts. My main gripe has been that the interest rates are not high enough to offset the tax implications and the increased default risk that we've seen over the past few years. As I've drawn down my account, almost all of my funds have been going to 3.3% FDIC insured CDs.

I just wanted to give everyone an update on my winding down of my Prosper and Lending Club IRA accounts. I decided that I didn't want to sell my notes on Folio, mainly because I felt like I would be better off letting them run out to maturity rather than progressively lowering the discount on each note in order to sell them. I've spent the last 3 weeks interacting with customer service from Strata and Equity (both custodians of my IRAs and Lending Club and Prosper, respectively). With some work, I finally got about $10k transferred into a 5-year CD at a local credit union at 3.2%. Keep in mind, my LC and Prosper IRA accounts are still open, so these were basically partial IRA transfers. The credit union that I'm using has their own form and I had to follow several steps in order to 1) Get free cash transferred from LC/Prosper to IRA custodian and 2) have the requesting IRA custodian pull the funds from the current one.

It has been mildly frustrating, but doable. The fee for Strata was about $20 for this transfer. I will repeat the process once or twice more as more notes in my IRA account are paid off in full. Prosper assured me that I wouldn't be assessed a low balance fee as I continually drain my IRA because I did at one time hit the $10k benchmark for having the fee reimbursed for them. Lending Club did not offer that assurance, but they said that they were moving to a new custodian anyway and migrating their customers over, so that any fee would likely be much lower than Strata is charging now (also, the CS rep said I could call back when the fee is assessed and see if I could have it waived, which I probably will do).

This is a general question for those of you who are selling IRA accounts to liquidate. Were you trying to clear out your entire IRA so you could do a one lump sum transfer of all idle cash from the IRA custodian (Millennial Trust) to another institution?

I looked at the fee schedule and, as best I can tell, it is a $150 fee to transfer out assets to a new custodian. I have a local credit union IRA in 5-year term deposits at 3.2% that I want to move my money too. The problem is that I have about $7k in idle cash in one of my Lending Club IRA accounts and I have about 400 other notes (approximately $4k) with some time to go before the notes will mature.

The dilemma I face is that I think I've already bitten the bullet for the worst of any defaults. So if I want to sell notes to get a clean IRA exit in one fell swoop, I'll probably have to discount those notes on Folio, some heavily. But I am reluctant to do this though because my reasoning is that I think what remains is has made it this far and the yields are pretty good (survivorship bias- most of the bad stuff is already charged off). However, if I keep pulling out money every so often out of the IRA, then I'll get nickel and dimmed by the IRA custodian for each asset transfer as far as I understand. So essentially I'm trying to figure out which will be less painful:

1) Do nothing: let idle cash sit in my LC account earning no interest while I'm waiting for the portfolio to wind down
2) Transfer out IRA money periodically without selling notes on Folio and get hit with IRA transfer fees each time
3) Take the losses that will occur by liquidating notes on Folio and get out in a one-and-done fashion

Any insight as to what you did and why would be appreciated.

This is excellent insight Rob. If I read these tables correctly, would I be correct in assuming that loans that were originated in Q3 of 2017 would be "expected" to perform similar loans originated in Q4 of 2014? I know major economic shocks and external events would change the trajectory and of course nothing is guaranteed, but it seems like if early indications of the trajectory look like the loan quality has improved relative to what was originated during 2015 and 2016. Is that a fair conclusion?

I am specifically thinking about reinvesting in B grade notes of 36 month duration. I have run down about $120k to about $40k now.

Much appreciated Rob L.