[jrl]

Just received this email:

Quote

[honvl]

https://www.lendingclub.com/investing/investor-education/what-are-the-eligibility-requirements-to-invest-through-lendingclub

"At this time, investing through LendingClub is only available to individuals residing in the U.S. Due to current state restrictions, investors who reside in the states below have limited investment access to Notes:

Residents of Alaska, Arizona, Florida, New Mexico, New York, North Carolina, North Dakota, Pennsylvania, and Texas can only purchase Notes through the secondary market. These are known as trade-only states.
Ohio residents aren’t able to invest in Notes at this time."

The temporary in the e-mail is a euphemism for "a long time."

[TravelingPennies]

from: honvl on September 23, 2019, 07:21:30 PM

[Debt Free]

Reel those lines in boys!  Time to find a new fishing hole.

[Edward Reid]

If anyone figures out what's really going on, I'm interested. Clearly it's something that happened at LC, not in the states, since several got restricted at the same moment. (I'm in Florida.)

Edward

[bkcarolina]

Time for a little a lot of transparency.

[Fred93]

from: Edward Reid on September 23, 2019, 09:30:18 PM

[TravelingPennies]

from: Fred93 on September 24, 2019, 04:23:56 AM

[Cam79]

It might not just be Lending Club, I tried signing up for Prosper and couldn't get past the first step, not available in my area(TX).  I checked their availability and Texas isn't listed, although I never tried signing up for them previously.

https://www.prosper.com/plp/legal/compliance/

[TravelingPennies]

Both Lending Club and Prosper still have active licenses as regulated lenders in Texas.  I sent a message to OCCC consumer assistance but the worker is out of office until next week. I'll update if I hear back.

Edit:
Looks like the links don't work, you can find them by searching here.

https://alecs.occc.texas.gov/Generic/AdvanceSearch?fromSource=true#

Lending Club
#154127

Propser
#47698

[TravelingPennies]

A license is not the only thing one needs.  One needs to believe one is operating within the rules set by each state.  Each state has lots of borrower protection rules.  A change in interpretation of one of these rules by the corporate lawyers could easily trigger this.  Could be as subtle as a perceived risk that some regulator might later interpret something as not being in compliance with some rule.  Could be triggered by a change in a rule, or a particular court case which gave some color to some rule, or a new lawyer bringing a new point-of-view about interpreting a rule.  Very difficult to diagnose from a distance.

[TravelingPennies]

from: Fred93 on September 24, 2019, 05:20:24 PM

[Rob L]

I'm surprised by this since I think it is only a matter of time before LC shuts down individual participation completely. According to their most recent quarterly report individual investors now represent only 5% of originations (lowest % ever):

https://ir.lendingclub.com/Cache/1001255340.PDF?O=PDF&T=&Y=&D=&FID=1001255340&iid=4213397

Why they continue it at all is an interesting question. Maybe they still make a bit of money from it but it seems pretty likely it's dying and LC will eventually pull the plug. The only reason I can imagine is that if LC shut it down they'd have to write off all the assets they carry on their books for this part of their business (software, computers, leases with cloud services providers, etc.). Might be a pretty big hit on the balance sheet that could hurt their stock price but I haven't done the research to figure out how big.

[TravelingPennies]

They did lay off the retail sales staff.

[TravelingPennies]

from: Rob L on September 25, 2019, 09:07:15 AM