Lending Club Investing: Good Passive Income Source? (Answer: NO)

[MJ DeMarco]

just couldn't justify the time spent

Huh? How do you know how much time I spent? I think since I started I've spent maybe 90 minutes TOTAL. I don't think 90 minutes is a waste of time to find out how to deploy capital earning 0% into capital earning 10%. And yes, what I'm learning now will transcend into larger amounts by adding notes, not by increasing the amount loaned.

Anyhow my daily investment is about 45 seconds a day-- in reality I spent more time answering your post than I have spent at LC in the last two weeks.

Duh.

I'd much rather be reading about you doing the next *amazing* business thing

I guess you didn't get the memo that I retired. I'm not interested in the "next amazing business thing" or being some guru talking about the "next amazing business thing" -- I'm interested in staying retired, investing, and promoting entrepreneurship-- the very thing that allowed me to retire 3 decades early.

Not you sitting at home chasing 9.5% by lending to Joe Broke in Oklahoma.

And I love it...

Sitting at home...

Because I can. @Vigilante

In any event, sorry that I have failed at satisfying your guru expectations.

 

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[MJ DeMarco]

My account is nearing a 10% return -- so far it seems to be a decent passive income source, picking up a few bucks freely without any time investment.

11% is nice, but $500 doesn't buy you an awful lot these days...

If I give you $500 for breathing, are you going to refuse and say, "Meh, that doesn't buy a lot."

 

[MJ DeMarco]

If anyone has any Lending Club experiences please share with us your experiences.

I've just created an account and am looking to report my experience to determine if this is a viable passive income source.

My experiences will be reported in this thread. Please read on...

 

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[MJ DeMarco]

exactly, everyone should continue to move their money away from funding a rigged game of thrones.

Unfortunately a megalithic financial institution is sometimes more safer than a startup who really isn't being held to any fiduciary standard. (Not that banks are either, but a BofA failure would send shockwaves in the financial system, a LC failure would not.)

The Lending Club model is awesome and I'm incredibly excited about. However I will NOT be depositing a substantial amount with them and will identify the funds as entirely risk capital.

These kinds of nouveau investment firms is how people lose millions. One moment you're lavishing at how your $500,000 account has accrued $150,000 in interest, and the next day you're reading an article at the Wall Street Journal detailing how the firm has gone bankrupt and has misappropriated billions of dollars to "fund operations" and "stay afloat" -- suddenly your $650,000 which was merely a digital imprint on a screen, is frozen, or worse, gone.

It's one thing to look at your computer screen and say, OMG, I earned 15% on my cash this year! It's another to actually get the money into your account. I noticed there is no option to receive your interest automatically deposited into your account. That concerns me. As of now, all systems are a go and they looking to be executing on point. I for one, however, will remain cautiously optimistic.

My first loans have funded and my first interest payments come at the end of January. I will continually report.

 

[LibertyForMe]

So I'm not exactly sure which borrower criteria you are allowed to take a look at, but I used to work in deep subprime auto finance. We gave loans to the riskiest populations that exist, and still made money. I worked in the risk department, so I saw the metrics that went into our custom risk models.

Here are some observations (keep in mind this was for the riskiest population of people that exists, and P2P lending probably has diffferent metrics):

• FICO is good, and does have a some correlation to risk, but don't rely on it 100%.
• You want to see if they have a mortgage and any other vehicles they are paying on. Ideally, you want their Payment To Income ratio to be below 15%. So if they make $1,000 per month, you want their payment to be below $150. The Debt To Income ratio is also useful; add their rent/mortage + any car payments + the loan payment. You'd like this to stay below 60% or so. So if they make $2,000 per month, their rent is $750, car is $250, and loan is $100, that is 60% and is pretty decent.
• No repos in the last year.
• No bankruptcies in the last year or two.
• If you can pull their Lexis-Nexis report, you will have a lot more good info. This data contains variables that show how often they've moved addresses in the last year or two, if their are any potential identity fraud issues, etc. This can be helpful if you have access to the data. You want someone who shows some stability.
• If you can get their employment history, that is good. You want someone employed more than 3-6 months at their most recent job. If you can verify their employment at their job, that is even better.
• Not sure if you get their location, but if so you can pull the demographic info from their zip code. Lets just say that it isn't compliant for large lending orgs to do this because of racial bias, but you can draw some conclusions and decrease your risk in this way.

I could go on, but you want to look for someone that shows stability and the means to pay.

--Also, wanted to throw this in here. You do occasionally get people who overstate their income, but it doesn't necessarily impact their riskiness. Just as often, maybe surprisingly, you get people who understate their income.

 

[MJ DeMarco]

Unless you're investing $100,000 or more at a time.... is any of this really worth the time hassle to manage it?

The whole point of taking time NOW w/a small investment is to investigate if it is worth a six-figure investment LATER.

I don't just dump six-figures into an investment without having a great feeling for how it works, how it needs to be managed, etc. Time spent on due diligence is not time wasted.

 

[MJ DeMarco]

Glad this got brought back up. Last time I looked into it I was unable to invest due to the state that I live in. It seems that it changed in July this year so I will be looking into this.

Same here. I was happily surprised to find it recently changed, giving me an alternative passive income source. At 7% for the lowest risk loans, it certainly beats 0.8% at a bank.

I'm willing to experiment and have some fun with it.

My only concern is LC themselves... its a $4B company but in my mind, still a "startup" -- even with success on this platform, I don't think I'd feel comfortable with $500K into their system. Not until I see some further maturation.

Here's an article and how it possibly can fit into an income scenario for a money system.

http://www.marketwatch.com/story/wh...ould-consider-peer-to-peer-lending-2015-12-29

 

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[iAmTrade]

These kinds of nouveau investment firms is how people lose millions. One moment you're lavishing at how your $500,000 account has accrued $150,000 in interest, and the next day you're reading an article at the Wall Street Journal detailing how the firm has gone bankrupt and has misappropriated billions of dollars to "fund operations" and "stay afloat" -- suddenly your $650,000 which was merely a digital imprint on a screen, is frozen, or worse, gone.

Can't merely say something won't work because of an emotional aspect of fear. Yea, things can turn to shit as easily as it is for someone's boss to say "you're fired"...

But lets take a look...

With Lending Club...
1. You are a lender.
2. You choose who to lend the $ to.
3. You have no limit to how many people you lend $ to (SEE Appendix A)
4. You get your interest if people pay on time, and you get squat if they don't.
5. You lose money if you have to go to collections to get paid.

Now... compare that to a bank...

1. Bank is a lender.
2. They choose who to lend the $ to.
3. They have no limit to the number of people they can lend to (SEE Appendix A)
4. Banks get their interest if they get paid on time, and they get squat if they don't. Or foreclose a home, repo etc, in essence they still lose money if they have to go to any kind of collections to get paid.

------
Now ...APPENDIX A...

What the bank does = $
What lending club does = $


Hence... $ from lending club for us, investors = $ for the bank and their investors (those people that keep deposits in their bank accounts for a .01% interest rate)...

Ah, so what do we see here? We can say..

Lending Club = A Bank (you get the point)...with better gains for the investor...
A Bank = lending club without the nice interest rates but with the security of not losing your money and in fact LOSING YOUR MONEY due to inflation.

Hence.... remove all money from the bank and give it to lending club.

The end.

(I am for P2P lending, and have used Lending Club since 2010 (when I turned 18). Have both been a lender, and borrower (for a new car). I have never, not, been given my dues when they were due to be paid out to me, then again I don't have 50k to use.

-------------
Aside from that... http://www.lendingmemo.com/sell-late-notes-lending-club/

If you are all dabbling in Lending Club a little... I HIGHLY SUGGEST you look into the article I just linked to. To sell your notes on lending club. If you do the math (they did it for you on the article)...you may, at times, be better off selling, before you lose the entire sum you invested for some notes.

I am also copying a little bit of the article at http://www.lendacademy.com/lending-club-review/

1. NSRPlatform (https://www.nsrplatform.com)
   Has a complete suite of useful tools for Lending Club investors. There is a back testing and filter feature that provides a front end to the entire loan history of Lending Club broken down by loan grade. Investors can test various filtering strategies to determine the best historical returns. Investors can also upload their own Lending Club portfolio for analysis. NSR can also be used for order management and automation.
2. LendingRobot (https://www.lendingrobot.com/)
   LendingRobot provides order execution for Lending Club and allows you to create filters to narrow your investment criteria. Besides filter based investing, they also offer a fully automated selection, which will invest in loans for you based on whether you seek a conservative or aggressive investment approach. They also provide data on order history, sell history and provide a cash-flow forecast.
3. PeerCube (http://www.peercube.com/lc/)
   PeerCube has two main functions. It provides an alternative to the Browse Notes section of Lending Club allowing investors to run more sophisticated filters. Then in just one click investors are taken to the Lending Club site to complete an investment on the loan. There is also a Portfolio Upload section where PeerCube provides analysis of an investor’s portfolio.
4. BlueVestment (https://bluevestment.com/)
   BlueVestment specializes in automation for LendingClub. Through BlueVestment, users can create their own filter criteria using 22 attributes and also create advanced filters using the node builder. From there, the strategy can be added to a Lending Club account for automation.

If you want to put a considerable amount of money in lending club, I suggest you take a look at the above 4 tools you can use.

If you want to see some results of someone sharing all his knowledge/progress with Lending Club... http://www.lendacademy.com/my-returns-at-lending-club-and-prosper/ look for Peter Renton's articles as they are full of gold nuggets. Everything at lendacademy is a nugget if you're seriously considering putting a lot of cash in P2P lending.

---------
Hope it was okay to post all these links. I gain nothing from the links themselves, I just copied and pasted some things I had saved in my bookmarks over the years.

Thats all I have to say. If you want returns above dumb bank runs, enjoy. Peter's the owner btw...

 

[Captain Jack]

I have been investing with Lending Club for about a year now. I've included my current statistics to date.

I was not fully invested until about 2 months ago.

 

[Captain Jack]

Bump.

If anyone has any Lending Club experiences please share with us your experiences.

I've just created an account and am looking to report my experience to determine if this is a viable passive income source.

I have been investing with Lending Club for about 6 months. I have about 250 notes and, according to the site, my return will be about 9%. I believe that it could have been more, but many of the notes that I initially invested in defaulted. I've created multiple portfolios and I'm currently tracking the progress of various subsets of notes in order to create and perfect a system to maximize returns (more on this later).

Overall, I am making more gains from this than any other current investment. Of course, this is not yet set in stone and I do not have enough data or experience for a final conclusion.

I will continue to post updates in this thread though.

 

[Captain Jack]

What criteria did you use? Anything notable?

I developed absolute criteria based on internet research (taken with a grain of salt, of course) and sensibility (in my opinion). I only invest in loans where the recipient:

- Has not had any recent delinquencies
- Has not had more than 3 credit inquiries
- Has a job (though this information is unverified)
- Is refinancing a loan (which, in my opinion, is more likely to be successful than say, starting a small business)

I've been experimenting with loan term and interest rate.

Here are my statistics so far:

I've invested approximately $7k so far over a 6 month time span.

Loan Term
- 60 month loan term: ~60% current (meaning that the other 40% has either defaulted or is late and will likely default)
- 36 month loan term: ~95% current

Interest Rate (only measures 36 month loan term)
- A-D: 100% current
- E-G: ~90% current

As I said though, I've only been doing this for 6 months. Many of the notes are more recent than that (since I only invest in a note when I see one that I like). So it's possible (and likely) that these numbers will worsen over time.

 

[GlobalWealth]

(You know, any organization you give $ to online, can perform a wire transfer to an offshore account. Leave the country, change their name and disappear forever...

Even more interesting, and possibly more disconcerting is that the US is the largest of these offshore tax havens. The US enforced FATCA on the world, but is one of only 4 countries so far to refuse to sign it. Irony?

The US wants to know everything about US account holders abroad, but refuses to reciprocate with ANY foreign agency when they want to know about their subjects' assets.

The huge irony in all of this is that those hidden trillions of untaxed assets, are mostly sitting in banks right in he the gold ole US of A. Primarily in NY.

So your point is correct, except that the money actually ends up at Chase or BofA.

 

[MJ DeMarco]

This can generate decent returns until vol skyrockets and you lose all your money. There is no way a retail investor can compete in this space against the quants & PhDs with billions of dollars in research and pricing models behind them.

(INSIDERS will get the joke.)

 

[MJ DeMarco]

I move to rename Lending Club to "Loans to Sidewalkers."

Geez.

I can't wait to get every dime of mine out of this turd pile.

Also see this thread:

*UNSCRIPTED* - What's your focus? Making pennies? Or Millions?

 

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[MJ DeMarco]

There is no collateral in P2P if these businesses close up shop.

Yup, and the way the stock market is behaving, we might be looking at Bubble 3.0. At the end of the day, P2P lending is still in it's maturation stage (for all intents still in the "startup" lexicon) and it wouldn't shock me if any of these companies collapsed in a Bubble 3.0 scenario. This is why all my cash there is speculative and a very tiny amount that I can afford to lose.

What people don't realize is that your money is just a digitized number on a computer screen. If the 3rd party holding that number says your money's gone because they went insolvent, well, it's gone.

 

[Runum]

I wasn't specifically asking you MJ, but since you responded

Listen, I still think it makes little sense. I don't believe the dynamics of you learning a $25-$50 loan are going to carry over to a $1000-$5000 loan on a P2P site. (yes, I understand we aren't discussing the total loan amount, but just your portion).

The guy looking to borrow $500 to pay for some medical bill is a different debtor than the person wanting $50k to remodel their rental.
They are different customers with unique backgrounds and goals - and I'm not sure the small scale investments teach you about the bigger ones.
Now, it's been at least a year since I poured into any of this myself, so, maybe the game has changed....

Maybe my more simple point is - I guess as wealth preservation, on a large scale at $100k+, sure, it's better than the bank, and it's probably a bit more fun than truly passive income. I get that.

But, I looked at it, and just couldn't justify the time spent, even if it was to learn.
By the time real capital is deployed, it's like fishing with dynamite. I just didn't see the return justifying the energy inputed. Even at 9.5%+.....

--
Also, on a much more simple note. You, MJ, are a very smart guy. You are the reason behind all of us being here.
I will be rather honest and say I'd much rather be reading about you doing the next *amazing* business thing, than you playing in P2P lending with the rest of us.

Maybe that's just giving you a hero complex, and I shouldn't do that, but, I think a lot of us look up to you, and what you've done.
It motivates us (me at least).

I think of you as going to mixers and meetings and networking with the next wave of internet professionals, hustlers, grinders.... the people working to make the next awesome internet things....

Not you sitting at home chasing 9.5% by lending to Joe Broke in Oklahoma.
You're amazing and you're an inspiration, maybe this thread is one of the first that doesn't inspire me (well, that float tank one was pretty weird too...) - and that's coming off here.

I just hope you're out crushing it today, keeping the beacon shining strong for the rest of us trying to emulate what you did.

This was a lesson I had to learn from @MJ DeMarco @RussH @SteveO and others in a book study we did many years ago. There are financial seasons in life.

There is a time to go go go and there is a time to work to preserve wealth. I believe the young guys and beginners are full of push to the limit, nothing wrong with that.

I also think that as you grow and become more successful you have more to protect. These guys have shown me several ways to preserve wealth for that time of life.

 

[fastbo]

View: https://www.youtube.com/watch?v=U7cZLy3rLgU

If you're going to gamble on prosper at least avoid some key words.

 

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[MJ DeMarco]

Received my first interest payment today!! Woo hoo 14 cents! Which BTW, is 14 cents more than I received from my checking account interest at my bank which has 10X the money.

Would you consider real assets (precious metals, real estate, etc.) more Fastlane control-wise? In general, how important do you think it is to shield yourself from these "digitized" forms of money? Do you worry much about it?

Its a concern but I don't lose sleep over it. I think the best defense against digitized money is to own your own home, that way the only payment is taxes and utilities. Still a government lease (taxes) but 200/mo sure beats $11k/mo.

 

[MJ DeMarco]

Can't merely say something won't work because of an emotional aspect of fear. Yea, things can turn to shit as easily as it is for someone's boss to say "you're fired"...

But lets take a look...

With Lending Club...
1. You are a lender.
2. You choose who to lend the $ to.
3. You have no limit to how many people you lend $ to (SEE Appendix A)
4. You get your interest if people pay on time, and you get squat if they don't.
5. You lose money if you have to go to collections to get paid.

Now... compare that to a bank...

1. Bank is a lender.
2. They choose who to lend the $ to.
3. They have no limit to the number of people they can lend to (SEE Appendix A)
4. Banks get their interest if they get paid on time, and they get squat if they don't. Or foreclose a home, repo etc, in essence they still lose money if they have to go to any kind of collections to get paid.

------
Now ...APPENDIX A...

What the bank does = $
What lending club does = $


Hence... $ from lending club for us, investors = $ for the bank and their investors (those people that keep deposits in their bank accounts for a .01% interest rate)...

Ah, so what do we see here? We can say..

Lending Club = A Bank (you get the point)...with better gains for the investor...
A Bank = lending club without the nice interest rates but with the security of not losing your money and in fact LOSING YOUR MONEY due to inflation.

Hence.... remove all money from the bank and give it to lending club.

The end.

(I am for P2P lending, and have used Lending Club since 2010 (when I turned 18). Have both been a lender, and borrower (for a new car). I have never, not, been given my dues when they were due to be paid out to me, then again I don't have 50k to use.

-------------
Aside from that... http://www.lendingmemo.com/sell-late-notes-lending-club/

If you are all dabbling in Lending Club a little... I HIGHLY SUGGEST you look into the article I just linked to. To sell your notes on lending club. If you do the math (they did it for you on the article)...you may, at times, be better off selling, before you lose the entire sum you invested for some notes.

I am also copying a little bit of the article at http://www.lendacademy.com/lending-club-review/

1. NSRPlatform (https://www.nsrplatform.com)
   Has a complete suite of useful tools for Lending Club investors. There is a back testing and filter feature that provides a front end to the entire loan history of Lending Club broken down by loan grade. Investors can test various filtering strategies to determine the best historical returns. Investors can also upload their own Lending Club portfolio for analysis. NSR can also be used for order management and automation.
2. LendingRobot (https://www.lendingrobot.com/)
   LendingRobot provides order execution for Lending Club and allows you to create filters to narrow your investment criteria. Besides filter based investing, they also offer a fully automated selection, which will invest in loans for you based on whether you seek a conservative or aggressive investment approach. They also provide data on order history, sell history and provide a cash-flow forecast.
3. PeerCube (http://www.peercube.com/lc/)
   PeerCube has two main functions. It provides an alternative to the Browse Notes section of Lending Club allowing investors to run more sophisticated filters. Then in just one click investors are taken to the Lending Club site to complete an investment on the loan. There is also a Portfolio Upload section where PeerCube provides analysis of an investor’s portfolio.
4. BlueVestment (https://bluevestment.com/)
   BlueVestment specializes in automation for LendingClub. Through BlueVestment, users can create their own filter criteria using 22 attributes and also create advanced filters using the node builder. From there, the strategy can be added to a Lending Club account for automation.

If you want to put a considerable amount of money in lending club, I suggest you take a look at the above 4 tools you can use.

If you want to see some results of someone sharing all his knowledge/progress with Lending Club... http://www.lendacademy.com/my-returns-at-lending-club-and-prosper/ look for Peter Renton's articles as they are full of gold nuggets. Everything at lendacademy is a nugget if you're seriously considering putting a lot of cash in P2P lending.

---------
Hope it was okay to post all these links. I gain nothing from the links themselves, I just copied and pasted some things I had saved in my bookmarks over the years.

Thats all I have to say. If you want returns above dumb bank runs, enjoy. Peter's the owner btw...

Some great links and info, thanks.

Just a point regarding risk. In a 2008 near financial collapse scenario (which could be brewing now) will these companies survive? I honestly don't know and I don't prefer to have six or seven figures into it to find out. On the other side of the coin, I'm not too worried that Vanguard or Ameritrade Holdings will survive. If the P2P companies don't survive, the world would chalk it up to more startup and disruptive technology failures, if the latter doesn't survive, the world would be in deep shit-- like apocalyptic.

 

[MJ DeMarco]

Now 30 days into it and the account is reporting 6.6% annualized return. Thus far my impressions are that this is going to be a nice tool to have in the money system toolbox.

 

[Vigilante]

Huh? How do you know how much time I spent? I think since I started I've spent maybe 90 minutes TOTAL. I don't think 90 minutes is a waste of time to find out how to deploy capital earning 0% into capital earning 10%. And yes, what I'm learning now will transcend into larger amounts by adding notes, not by increasing the amount loaned.

Anyhow my daily investment is about 45 seconds a day-- in reality I spent more time answering your post than I have spent at LC in the last two weeks.

Duh.



I guess you didn't get the memo that I retired. I'm not interested in the "next amazing business thing" or being some guru talking about the "next amazing business thing" -- I'm interested in staying retired, investing, and promoting entrepreneurship-- the very thing that allowed me to retire 3 decades early.



And I love it...

Sitting at home...

Because I can. @Vigilante

In any event, sorry that I have failed at satisfying your guru expectations.

You're not a good guru. You're supposed to be creating a sales funnel.

Stop trying to teach us new stuff you are learning. Do you think Tai Lopez is worried about this shit?

By the way, here is my office this afternoon. Hope @LightHouse doesn't see this. I think I made a bad decision. I AM working, though. I'm actually writing some of the best copy here, inspired. My biggest fear was that I think I set my computer bag down in Gulf Coast Seagull shit. And, my battery is about to run out on the Chromebook. I might have to go to the office in a bit.

Carry on with your lesson. Many of us are listening.

 

[Captain Jack]

Would you invest more?

11% is nice, but $500 doesn't buy you an awful lot these days...

Well, my actual return thus far, based on those numbers, is $344 since a few notes defaulted or are late. This number, however, is not an accurate reflection of the amount of money invested since I invested slowly throughout the year.

I think that this is a great investment strategy, but, like MJ said, it's speculative. I wouldn't feel comfortable investing significant savings into this one platform.

With that said, I'm seriously considering opening up accounts on other P2P sites. I'm looking at Prosper right now. I figure if one goes under (which is unlikely, but possible), then I'll be adequately diversified so that I don't take a major hit.

So to answer your question, yes, I would invest more, but I would spread my investments throughout multiple platforms.

 

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[MJ DeMarco]

Any updates on experiences with LC?

At this very moment I have 180 notes, with 200 total.

My current annualized return right now is 9.42% -- adjusted by the lates and charge offs (3 are over 30 days late) the return is stated as 6.8%.



I've stopped putting money into it -- as I mentioned somewhere else in this thread, I don't trust any significant amount of money to a financial startup who has minimal oversight.

 

[MJ DeMarco]

Basically a 10% default rate.

Now I'd be happy losing just a few %.



What a waste of time and money -- not so much the money, but I've probably wasted a few hours of my life (in aggregate) on this shit.

I'd close the account, but I still have 121 notes waiting for their eventual default. And I refuse to give it any more seconds of my life.

 

[MJ DeMarco]

Chinese P2P platform exposed as Ponzi scheme. (To the tune of 76 BILLION dollars. Yup, "B".)

http://www.marketwatch.com/story/ch...tors-of-76-billion-in-ponzi-scheme-2016-02-01

 

[MJ DeMarco]

From my research on lending clubs and other private loan sites, the loans are not backed by collateral. To me, this suggests that my principle would be at risk from loss without recourse. It is for this reason "I'M OUT."

Yup, they are unsecured which is why it's best to have 100's of loans as opposed to 2 or 3.

My predicated return is now up to 8.8%.

 

[MJ DeMarco]

can't get link.

http://www.marketwatch.com/story/le...rutiny-of-the-peer-to-peer-lending-2016-05-09

And this is why I refuse to allocate big dollars to, what I still call, a startup.

 

[Captain Jack]

Ceo resigned today. Article in usa today. I am on cell and can't get link.

http://www.wsj.com/articles/lendingclub-ceo-resigns-over-sales-review-1462795070

Based on this article, it seems like LC had sold loans to a big investor in which the borrowers had a lower credit score than advertised. Also, they had extended the due dates on these loans to give the appearance of compliance.

Obviously, this is an issue. Where there's smoke, there's fire. If they were caught this time, they likely did it multiple times in the past without being caught.

Like MJ (wisely) said previously, this is speculative money in an unproven niche. It's a good lesson in diversification. I've paused my automatic investing at this point and will just ride out the rest of the loans that I'm invested in.

 

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[Captain Jack]

Thanks for the link guys.

It reads like the freaking amateur hour. After 2008 debacle and the passage of peer to peer lending didn't they think that this crap would be uncovered? Maybe more crap to come out in the near future?

At least the board of directors cut it off and announced it quickly (at earnings time, no less). But you're right. Who knows what will happen. It's surprising that the founder of this company would do something that could potentially destroy it (as opposed to a non-founding CEO, who has much less blood, sweat, and tears in the company). That is also not promising.

 

[MJ DeMarco]

http://www.businessinsider.com/lend...stigations-could-buy-more-of-its-loans-2016-5

Just screams lack of confidence...

The immediate concern for LendingClub's management is to prop up the flagging business and stop it from imploding.

LendingClub says: "A number of investors that, in the aggregate, have contributed a significant amount of funding on the platform, have paused their investments in loans through the platform. As a result, the company may need to use its own funds to purchase these loans in the coming months."

Anyhow, I'm glad I don't have six-figures there as my original caveat has rung true, far sooner than I would have expected.

Nonetheless, I truly think this will blow over and everything will turn out OK, at least in the near term. The fundamental risk however, still is there.