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Comment by chiph | Hacker News Reader

> Lending Club is not a bank. So it's not subject to banking regulation, which means that it can do a core function of banking much more efficiently than an actual bank can.

Are the various banking regulatory agencies in agreement with that? (FDIC, Federal Reserve, Comptroller of the Currency, Thrift Supervision, as well as the various and sundry states)

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I don't know about federal regulations, but state regulations have made things difficult. I can't use lending club here in Ohio, and a few other states don't allow it either.

Here is more about that: http://www.lendacademy.com/why-some-states-dont-allow-p2p-le...

Well, LC doesn't do deposits, so it is not doing partial reserve banking. I suppose there could be extra regulation attached to what they do, but I don't think it is much different than a message board that connects buyers and lenders at its core.

While LC is not a bank -- and not subject to banking regulations -- its not at all a "message board that connects buyers to lenders". While it initially was something like that (and still has some superficial resemblance to it), lending is a tightly regulated industry, and there'd be a very narrow market if it it tried to actually be that, rather than being the lender itself and selling notes tied to its loans (essentially, a key part of the service LC is providing is dealing with the regulatory compliance with regard to lending.) This is the same model as is used by other superficially "peer-to-peer" lending services (e.g., Prosper.com)

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