- Thomas W. Casey departing CFO role at Acelity this week
- Casey replaces Dolan in tumuluous year for lending venture
LendingClub Corp. hired Thomas W. Casey, a former Washington Mutual Inc. executive who worked at the savings & loan when it was seized by regulators in 2008, to be chief financial officer.
Casey, most recently the CFO at medical-device maker Acelity LP, will take the new position on Sept. 19, according to a statement Monday from San Francisco-based LendingClub. He fills a void that was created when Carrie Dolan stepped down last month, adding to months of developments that have shaken confidence in the online-lending pioneer.
“This is an important additional brick in solidifying the foundation that we wanted to put in place post our recent events,” LendingClub Chief Executive Officer Scott Sanborn said in a phone interview. “This is absolutely a critical milestone for the company as part of the process of moving forward.”
LendingClub has had a tumultuous year. In May, founder Renaud Laplanche resigned as CEO amid an internal investigation into a botched sale of loans that revealed weaknesses in the company’s controls. The revelations prompted government probes, left many buyers of the company’s loans on edge and sent its stock tumbling.
The shares have slumped 49 percent this year and closed Monday at $5.59 in New York.
Loan originations have also plummeted. They were down 29 percent in the second quarter to $1.96 billion from the first three months of the year, the company said last month, when it announced Dolan’s departure. Her position was filled on an interim basis by Brad Coleman, LendingClub’s controller.
Once the nation’s biggest thrift, WaMu was seized by federal regulators amid the global credit crisis as a portfolio of subprime loans helped drive its market value down by more than 99 percent. Casey was CFO at the time and stayed on at the firm as the U.S. government engineered its sale to JPMorgan Chase & Co.
He later departed the company and went on to work at Clear Channel Outdoor Holdings Inc. and closely held Acelity.
“I did learn a great deal during that time, including the importance of strong liquidity as well as having a strong relationship with the regulators,” Casey, 54, said of his experience at WaMu in an interview Monday. He added that he was “quite encouraged” by his due diligence on LendingClub and how it approached its relationship with government officials.
Once a market darling, LendingClub helped pioneer online lending in the U.S. and grew to operate one of the largest marketplaces for matching borrowers with investors who want to fund loans. It was the first in its industry to sell stock to the public in late 2014 and briefly attained a valuation of more than $10 billion.
While the company is now worth less than a quarter of that sum, it has started to rebound from its low point in May. In recent months, the company has said it’s “substantially” done with internal reviews and many big loan buyers are finishing due diligence checks and resuming purchases, albeit at lower volumes. It’s also brought in new executives to help it court loan buyers.
Casey’s background should be an asset to LendingClub, even given his involvement in WaMu’s collapse, said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.
“LendingClub’s problems are already known, at least generally,” Gordon wrote in an e-mail. “It needs a CFO who has worked under survival conditions at a company whose every move will be scrutinized.”