http://blog.maxdunn.com/articles/2009/02/21/sustainable-banking-lending-club en-us 40 Max Dunn's Blog <p>With the recent financial breakdown, it was refreshing to hear of a new type of bank at the <span class="caps">VLAB</span> event <a href="http://www.vlab.org/article.html?aid=251">Upside of the Downturn</a> on January 20th, 2008.</p> <p>Renaud Laplanche, Founder &#38; <span class="caps">CEO</span> of the <a href="http://www.lendingclub.com">Lending Club</a> described how normal banks pay 2-3% but collect 16%. Lending Club lenders on the other hand, get 10.29% while borrowers pay 13% on average. The Lending Club narrows the spread rates by transacting over the Internet and having people lending to other people. As a lender, you can choose which borrower to lend to which creates a connection and social responsibility among users. Borrowers are also carefully screened and 85% are declined, so only prime borrowers are accepted. This leads to a low default rate of 2.7% and a late rate of 3.8%. The Lending Club is experiencing high growth rates of 50-100%, and in December of 2008, $2.5M was placed.</p> <p>Maybe this is a new model for more sustainable banking!</p> Sat, 21 Feb 2009 11:35:00 -0800 urn:uuid:92d7c761-e579-4339-91e1-c666254177f3 Max Dunn http://blog.maxdunn.com/articles/2009/02/21/sustainable-banking-lending-club Random Thoughts <p>I have had a poor experience with Lending Club. I loaned out $1000. and have had many people default. I&#8217;ll be lucky if I get my $1000 back.</p> Tue, 03 Mar 2009 20:54:30 -0800 urn:uuid:1900b051-7a54-427d-a9de-600f8c6e2d73 http://blog.maxdunn.com/articles/2009/02/21/sustainable-banking-lending-club#comment-742