LendingClub CEO Says He's No Threat to Banks, Just Their Model

  • Online lending company sees bank partnerships as path to grow
  • Banks' low cost of funds complement LendingClub, CEO Says

Renaud Laplanche, the chief executive officer of LendingClub Corp., is more interested in working with banks than replacing them.

His company, which matches borrowers and investors over the Internet, sees opportunities to continue growing by partnering with banks -- both to find new customers and to fund them. Speaking at the Bloomberg Markets Most Influential Summit in New York on Tuesday, he adopted a less-aggressive stance than the classic role of a technology-based disruptor looking to replace traditional industry.

“We’re a threat to the model, but we are not necessarily a threat to the bank,” said Laplanche, 44. “When we talk about transforming the banking industry, it’s a positive transformation for the consumer. But it could be a positive transformation for the bank.”

LendingClub already has made some inroads with banks. The San Francisco-based company said in April that it would work with Citigroup Inc. to provide as much as $150 million in affordable loans to underserved borrowers. Laplanche also forged a pact with a network of community banks to co-brand personal loans.

His firm arranged more than $3.5 billion in debt in the first half of the year, mostly for customers seeking to pay off or refinance existing debt. The company is able to make loans over its website at lower rates than carrying a balance on a credit cards, in part because it doesn’t operate a network of branches. LendingClub also automates portions of the underwriting process.

Still, it needs investors to fund the debt, which is why banks are attractive partners, Laplanche said.

“Banks continue to have access to very low cost of deposits,” Laplanche said. “So the combination of a bank and LendingClub is really the best of both worlds, where you get the lowest cost of operations and the lowest cost of capital. And together we can drive down the cost of credit for consumers and for businesses.”

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