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Comment by bsims | Hacker News Reader

A part of this article is false.

"LendingClub doesn't loan out its own capital and collects fees of loans that are originated on its platform from both individuals and more sophisticated investors alike."

Lending Club owns a subsidiary fund that invests in the platform as well.

Investors should be aware that LC is both a platform, and an investor in it's own platform which, if not monitored closely, can be potentially dangerous.

[Source] http://www.prnewswire.com/news-releases/lending-club-announc...

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I don't think it is. The subsidiary you are talking about LC Advisers isn't using LC's own capital. It is a vehicle that manages investments from institutional investors.

As LendingClub has grown it has transitioned from a purely P2P model where individuals made the majority of the loans to a whole loan model where banks and other accredited institutional investors make up the majority of the loaned capital. They still have the original platform but their growth isn't coming from Joe off the street it's coming from big banks etc... who see this as a cheaper way to do underwriting.

Agreed on the institutional side. However LC also invests in their own loans from time to time, both directly or through LC Advisers.

In the early days LC invested their own capital more heavily to make sure loans were fully funded, and to ensure the community was active enough.

This is why they have "funded_amnt" and "funded_amnt_inv" to denote how much of the loan was funded by investors vs. internally.

LC no longer invests any significant amount of own money in loans. See https://www.peercube.com/blog/post/11 for the analysis. IMO, it is negative that LC no longer has their own skin in the game as their interests are no longer aligned with lenders on their platform. Most of the recent policy changes, for example loosening the credit quality and charging lenders to pay for collection and charging lenders for first few days of interest to LC's loan originator, seem to reflect this dissociation.

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