LendingClub controversies
Controversies tied to this brand in public sources. A listing is not a finding of fault.
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2021
LendingClub agrees to $18 million FTC settlement over alleged advertising and fee practices
Settlement
LendingClub agreed to pay $18 million to settle an FTC dispute over allegedly hidden borrower fees and other alleged misleading practices. The settlement bars misrepresentations to applicants and requires clear disclosure of origination fees; LendingClub did not admit wrongdoing, and the settlement still requires federal judge approval.
Company response
Denial — LendingClub
While we have never agreed with the FTC's allegations
Source excerpt
LendingClub has agreed to pay $18 million to settle a three-year-old dispute with the Federal Trade Commission, which involved allegedly hidden fees charged to borrowers.
The settlement, which was made public Wednesday, prohibits the San Francisco-based lender from misrepresenting information to applicants, and specifically requires the firm to “clearly and conspicuously” disclose any origination fees that borrowers must pay before getting a loan.
LendingClub, which was accused in a 2018 lawsuit of misleading customers in advertisements, did not admit wrongdoing under a settlement with the Federal Trade Commission.
2021
LendingClub reaches settlement with the FTC
Settlement
LendingClub announced an agreement with the Federal Trade Commission that, subject to court approval, would conclude the agency's previously disclosed investigation and litigation. LendingClub disputed the FTC's allegations, and the settlement includes no admission of liability.
Company response
Refund or compensation — LendingClub
LendingClub will make an $18 million payment for consumer remediation
Source excerpt
While we have never agreed with the FTC's allegations, we appreciate the important role the FTC plays to protect consumers and are pleased to have reached an agreement that resolves the agency's concerns,
today announced that it has entered into an agreement with the Federal Trade Commission (FTC) which, subject to court approval, will conclude the agency's previously disclosed investigation and litigation (the Settlement).
The Settlement does not include any admission of liability
2020
Texas fines LendingClub $400,000 over unregistered loan sales
Fine or penalty
The Texas Securities Commission fined LendingClub $400,000 over unregistered sales of loans in Texas. A consent order found that LendingClub had to be registered as a dealer in Texas in order to sell the notes. The event was reported as a regulatory action concerning the registration status of the company's loan sales in the state.
Source excerpt
The consent order into which it entered with the state, however, found that LendingClub must be registered as a dealer in Texas to sell federal covered securities such as the notes.
The Texas Securities Commission has fined LendingClub Corp., a national online lending marketplace, $400,000 for the unregistered sales of loans in the state.
2017
Post-scandal investor-confidence difficulties
LendingClub continued to face difficulty attracting major loan purchasers and managing loss expectations after the 2016 governance crisis. The episode illustrated the broader funding and credibility pressures affecting marketplace lenders during the period.
2016
Loan-sale and disclosure governance scandal
An internal review found that certain loan records and eligibility issues required investigation, including approximately $22 million in loans sold to Jefferies that did not meet the stated investment criteria. The board also determined that CEO Renaud Laplanche had not adequately disclosed a personal interest in an investment fund connected with a potential transaction and had not fully disclosed information relating to the loan issues. Laplanche resigned in May 2016, other managers departed, and the company faced significant investor and reputational damage.