LendingClub will stop offering retail peer-to-peer investment at the end of the year as it moves towards becoming a bank holding company following an agreement to acquire Radius Bancorp.
The US P2P lending platform has filed an 8K with the Securities and Exchange Commission stating it will stop offering retail notes as of the end of 2020.
LendingClub said that it has applied to the Federal Reserve to become a bank holding company after entering into a plan to acquire Radius Bancorp in February in a cash-and-stock deal valued at $185m (£143.7m).
The platform said it will develop new products as a bank holding company, including a high-yield savings account that will be initially exclusively available to its existing retail investors.
“As LendingClub progresses in its objective to become a full-spectrum fintech marketplace bank, the company has been evaluating its current and future product suite and has started development of new products aimed to better serve its customers.
“LendingClub plans to offer a full suite of products as a bank,” the company said in the 8K document.
“This includes a high-yield savings account that will be initially exclusively available to its existing retail investors and will offer a compelling interest rate, as well as other products that take advantage of the marketplace to allow its customers to both pay less when borrowing and earn more when saving.”
LendingClub said that from tomorrow (Thursday 8 October) it will no longer process the opening of new retail note investment accounts.
The platform said this will allow it to redeploy capital and improve efficiency and thus increase the number of its members as it heads towards closing the merger and becoming a bank holding company.
This year LendingClub has been hit hard by the Covid-19 crisis, attributing this to a 90 per cent year-on-year fall in its loan originations in the second quarter.
The platform’s board approved a restructuring program that included workforce reductions affecting approximately 460 employees.
Meanwhile, in terms of its borrowers, the platform launched a member centre with tools and support for them and revealed that the majority avoided signing up to a payment holiday.