P2P Lending / NFT Lending Forum

I got an email from LC that my maintenance fee of $100 will be coming due in August and if I don't pay, I will accumulate a maximum of $30 in late fees. If it is not paid by Dec 31, my Strata Ira will be closed and the Ira account automatically converted to a taxable LC account. It will be treated as an IRA distribution and will be taxable. Since I am over 59.5 years old, and I only have a few thousand in the IRA, this seems like a great way to close the Ira and wait for the outstanding notes to be paid off without selling them at fire sale prices.

In addition, with LC you are taking single company risk; with HYG you are not.

I transferred cash from an sdira services ira to a bank ira last year; I was charged $100. This year I transferred to a Vanguard ira; I was charged $50. You want to initiate the transfer from Vanguard's web site which is the destination of your funds.

Institutional investors and high net worth clients of LC Advisors have a BRV type structure in place to protect their interests. Don't know why LC doesn't give this protection to retail investors. Maybe most retail investors don't care or are unaware of the risks.

We want a BRV. But it will never happen because they don't give a damn about us.

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.

I have an appetite for consumer credit risk. What I don't have an appetite for is equity risk in LC, which is exactly what you get when you invest in LC notes without a BRV. When you purchase LC notes, you are basically purchasing the equivalent of a LC junk bond whose returns are tied to the notes that you selected. You are at the mercy of business decisions that LC makes to maximize shareholder wealth. They can expend cash to buy back their stock (which they have already done and have authorized themselves to do more of), they can incur debt to make acquisitions, etc.. As far as I know, unlike bondholders, noteholders don't have any protective covenants to restrict LC's behavior to protect their interests. If I were interested in investing in junk bonds, I would do so only through a well diversified portfolio of them like the HYG ETF has. Institutional investors are not stupid; that's why they demand LC protects them through a BRV.

If the new management team has half a brain they would institute a BRV for retail lenders to add confidence. I know I would not invest another dime in this company without one.

My understanding is that the institutional crowd and high rollers that invest through LC Advisors, a subsidiary of Lending Club, already have a BRV; LC Advisors provides them with one. Lending Club refuses to provide retail investors with the same protection. Seeing as Prosper is able to provide retail investors with a BRV, I wonder why.

I invested high 5 figures in Lending club notes, and so far have been very satisfied with the returns. However, I have stopped re-investing cash from paid off notes, and plan on withdrawing cash as it accumulates. When I started investing a couple of years ago, I had hopes that Lending Club would eventually implement a BRV for retail investors, but have given up on that happening. In the event of Lending Club failing, I think I would just be another unsecured creditor waiting in line to pick at the bones of a dead corporation. While Lending Club may have a strong balance sheet now with little or no debt, I don't think there are any covenants protecting retail investors from Lending Club incurring debt in the future to do stock buybacks, or making acquisitions that may or may not succeed. Lending Club, I think, would like retail participation to grow because its funds are more stable than institutional hot money; from this perspective, I think it was a big mistake for Lending Club to go public before implementing a BRV like Prosper did for retail investors. After going public, every day I can see stock market investors' best opinion of the future prospects for the company, and it doesn't seem very encouraging with the stock down significantly from its IPO price; this makes me nervous. One of the reasons, I invested in Lending Club notes was to escape the gyrations and risks of the stock market; without a BRV, it has just followed me, which is why I am cashing out despite the excellent returns.