Jefferies Said to Have Pushed LendingClub to Fix Disclosures

Weeks before a debacle that led to the resignation of LendingClub Corp.’s chief executive officer, investment bank Jefferies Group asked the online lender to bolster its disclosures to borrowers, people with knowledge of the matter said.

Jefferies planned to bundle LendingClub loans into bonds. But it wanted to be sure that customers of the online finance company fully understood what rights they were signing over to the lender when they applied for credit. The bank demanded that LendingClub better disclose to borrowers that those rights, known as "power of attorney," allow the company to close loans faster, potentially by accessing information about customers’ assets and income.