Comments on: Why Lending Club Isn’t For Most People

By: Mary

Mary — Wed, 03 Jun 2009 16:59:09 +0000

Have y’all considered your 401K as part of your net worth?

By: Mike

Mike — Mon, 13 Apr 2009 03:10:37 +0000

When you join Lending Club, by accepting their conditions you are declaring that you meet all eligibility requirements. They don’t check on these, as far as I know. It would be against their best interest to actively keep potential lenders out of the pool, but you can bet if someone tried to sue them for some reason, they would want copies of your tax return and net worth statements right away! It would be interesting to have the data to see how the lenders are distributed within those 25 states. Lending Club recently made an IRA investment product available as well, and I opened up an account. I had to use a different email address for the new account. The interesting part is that when I was reviewing the fine print, I came across the fact that one person can’t have more than one account! They knew I already had a regular account and wanted a different email for the IRA account. Weird…

By: Most Popular on Consumerism Commentary, March 2009 - Consumerism Commentary, personal finance since 2003

Wed, 01 Apr 2009 13:55:07 +0000

[...] some excellent articles this week including the host’s “Editor’s Picks,” Why Lending Club Isn’t for Most People, and Is Buying a Repossession Capitalizing on Someone Else’s [...]

By: Stephanie PTY

Stephanie PTY — Tue, 31 Mar 2009 22:26:48 +0000

After the income requirement was brought to my attention, a friend of mine emailed Lending Club to ask if the income requirement was for individual income, or household income. The answer he received was, in my opinion, hugely vague and unsatisfactory:

“Thank you so much for your email. I wanted to touch base with you regarding your question. Most State regulations require that our Lending Members represent financial suitability standards to invest. This information is self reported.”

By: Slinky

Slinky — Mon, 30 Mar 2009 21:48:29 +0000

I’ve also seen a huge buzz about lending club lately with all the sign up bonuses bouncing around. I’ve pointed out the restrictions to a few people, but they seem to be mostly ignored. People sign up anyway (as it’s not verified). The problem is, these people are violating all that stuff the had to agree to when signing up, so if anything goes wrong with their cash, they’ve got nothing to stand on.

By: Kyle

Kyle — Tue, 24 Mar 2009 20:51:10 +0000

@ Mike I agree, I think that given time they will slowly get registered with the appropriate authorities for each state and will be able to offer it to all residents. The income requirements are kind of steep though, steep enough to count me out anyway.

By: Mike

Mike — Tue, 24 Mar 2009 18:58:35 +0000

Both restrictions appeared after Lending Club registered with the SEC. After the registration process, they periodically started announcing states that had approved lending. At first it was only a few states, and now stands at 25. Approval has been requested from all states and some seem to be taking longer than others. I expect that in time all states will be included and that the income requirements are stipulated by the SEC. Since Prosper is currently registering with the SEC (they’re way behind LC on that count) I expect similar restrictions to be put in place on Prosper as well.

By: Trevor @ Financial Nut

Trevor @ Financial Nut — Mon, 23 Mar 2009 16:32:33 +0000

Well… that counts me out.

By: the weakonomist

the weakonomist — Mon, 23 Mar 2009 12:13:53 +0000

I’m sure there are resonable explanations for the states, others states must have laws that forbid this kind of lending. Depending on the legal lingo, it might make you look like a loanshark.

Their restriction sure are strict, but that could possibly be a good thing. Somone with a heart of gold and a mind of stupid might make the mistake of investing too much and losing thier money. It would protect lending club from getting sued.

I still think their business is sound and they’ll iron out these restrictions over time. Thanks for pointing them out though, I wasn’t aware of them.

By: Prince Of Thrift

Prince Of Thrift — Mon, 23 Mar 2009 10:06:29 +0000

well I would be shut out twice. Since I live in Kansas nd only make $30,000.