SAN FRANCISCO, Aug. 19, 2015 /PRNewswire/ -- Lending Club (NYSE: LC), the world's largest online marketplace connecting borrowers and investors, announced today that Springstone Financial, LLC (Springstone), a subsidiary of Lending Club, agreed to settle with the Consumer Financial Protection Bureau (CFPB) related to the staff's concerns on possible borrower confusion about the terms of a deferred interest product, which was terminated by Lending Club shortly after its acquisition of Springstone in April 2014.
To resolve this matter, Springstone agreed to pay restitution of $700,000 to certain borrowers in its finance program from 2009 to 2014. The settlement amount is fully covered by the indemnification provisions of the Springstone purchase agreement and therefore will not result in any adverse financial charge to Lending Club.
Lending Club previously disclosed in its filings with the U.S. Securities and Exchange Commission that it was engaged in discussions with the CFPB in connection with Springstone's previous financing products. The settlement does not involve any penalties or fine or admission of wrongdoing on the part of Springstone or Lending Club or their employees, directors, officers or agents.
Renaud Laplanche, founder and CEO of Lending Club, said, "The product in question, which is popular in many finance programs, provided for the potential of interest being charged retroactively to the customer and as such was not up to Lending Club's standards of transparency, consumer friendliness and responsible lending. We terminated this product shortly after the acquisition of Springstone and replaced it with a more transparent and responsible, true no-interest product. We appreciate the CFPB's assistance in arriving at a fair outcome for Springstone customers while raising the bar on consumer protection."
About Lending Club
Lending Club's mission is to transform the banking system to make credit more affordable and investing more rewarding. The company's technology platform enables it to deliver innovative solutions to borrowers and investors. Since launching in 2007, the Lending Club platform has facilitated over $11.2 billion in consumer loans and has more than doubled annual loan volume each year. We operate at a lower cost than traditional bank lending programs, so we're able to pass the savings on to borrowers in the form of lower rates and to investors in the form of solid returns. Lending Club has been prominently recognized as a leader for its growth and innovation, including being named one of Forbes' America's Most Promising Companies three years in a row, a CNBC Disruptor two years in a row, a 2012 World Economic Forum Technology Pioneer, and one of The World's 10 Most Innovative Companies in Finance by Fast Company. Lending Club is based in San Francisco, California. More information is available at https://www.lendingclub.com. Currently only residents of the following states may invest in Lending Club notes: AR, AZ, CA, CO, CT, DE, FL, GA, HI, IA, ID, IL, KY (accredited investors), LA, MA, ME, MN, MS, MT, NH, NV, NY, OK, RI, SD, TX, UT, VA, VT, WA, WI, WV, or WY. All loans made by WebBank, a Utah-chartered Industrial Bank, Member FDIC.
Some of the statements in this above are "forward-looking statements." The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," "would" and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. The Company may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements. The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Information in this press release is not an offer to sell securities or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Additional information about Lending Club is available in the prospectus for Lending Club's notes, which can be obtained on Lending Club's website at https://www.lendingclub.com/info/prospectus.action.
SOURCE Lending Club