It was three ago last week when LendingClub closed its acquisition of Radius Bank. At that time LendingClub entered into an operating agreement with the OCC that imposed capital restraints and growth limits on the fintech pioneer.
Last week that agreement expired and LendingClub will now be less constrained and will pursue options to take advantage of its capital position. Of course, it is still a regulated bank, so there are standard constraints that apply to all banks.
An analyst noted that LendingClub has about $400 million in excess capital, money it can now use to buy back stock or for other initiatives. One example could be an expansion of its structured certificate program, a securitization program that LendingClub introduced last year.
LendingClub has come a long way from its start as a peer-to-peer lending platform and is now one of the largest personal loan providers in the country.
This year will mark the 10-year anniversary of its IPO but its valuation is still a fraction of its IPO price. The company is not expected to regain that valuation any time soon but at least it will have fewer constraints on its growth now.
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The San Francisco company entered into a pact with its regulator when it acquired Radius Bank three years ago. “The operating agreement, by design, in some ways slows you down,” said CEO Scott Sanborn.
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Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.