LendingClub Boosts Interest Rates, Tightens Standards for Loansby
LendingClub Corp., under pressure to bolster investor confidence in the loans it arranges online, is boosting interest rates and tightening criteria for borrowers to qualify.
Interest rates will increase by a weighted average of 55 basis points, the company said Tuesday in a regulatory filing, minutes before it was to start its annual shareholder meeting. The San Francisco-based firm also lowered the ratio of debt-to-income that it allows applicants to have.
Acting Chief Executive Officer Scott Sanborn is trying to shore up investor confidence hurt by last month’s announcement that a botched loans sale and disclosure lapses prompted the resignation of founder Renaud Laplanche. That exacerbated a slide in the firm’s stock over the past year amid concerns that it might struggle to lure investors necessary to extend its rapid growth.