LendingClub (NYSE:LC) is exiting the yacht lending sector. While most people were probably unaware that Lendingclub provided loans for boats, the digital bank announced this week that yacht lending will no longer be a part of their business.
In a blog post, LendingClub CEO Scott Sanborn said that after a year of operating Radius Bank (now LendingClub Bank) they have decided to make several changes.
While the yacht business was mentioned, Sanborn said that they are:
“… asking certain partners to modify their activities and/or operations to match expectations and contractual commitments, and we have begun exiting certain partners. As part of the ongoing dialogue with these partners, we have discussed transition plans or operational changes that could impact the services available to these partners and their customers.”
Details on these partners, as well as the extent of the relationship, were not provided. Sanborn did say they anticipate boosting their auto lending business to take the place of the yachts. Auto refinance loans are now available in 40 states, covering 94 percent of the U.S. population, and LendingClub claims that borrowers have saved an average of $4,000 over the life of the loan. The product was first launched in California in 2016.
Sanborn added that these actions would have no material effect on their business.
LendingClub started as a peer-to-peer lender, then a marketplace lender, and now is one of the few US Fintechs to be a nationally chartered bank. While P2P/marketplace is no more, LendingClub appears to be in a good position to pursue the future of banking providing branch-free banking services. The Biden administration has been less innovation friendly when it comes to Fintech and does not seem to be inclined to move forward with more digital bank charters (at least not quickly). This should help LendingClub compete against neobanks and incumbents.
LendingClub should announce Q4 2021 results in February (latest March) and may provide additional information regarding exited businesses at that time.