I still remember the day well. It was back in December 2012 when the LendingClub PR people reached out to me to say they had an announcement of a high profile new board member. I am normally a bit skeptical of these announcements because a PR person’s definition of high profile and mine were usually quite different. That was not the case here.
When I heard it was Larry Summers joining the board I was astounded. Here was a former Treasury Secretary under President Clinton and former head of the National Economic Council under President Obama believing our industry was going places. Keep in mind this was back in 2012. LendingClub was two years away from their IPO and while they were getting traction (they had just crossed $1 billion in total lending the previous month) in many ways they were still a startup. The industry as a whole was still very much unknown and this announcement really grabbed everyone’s attention, including mine.
Yesterday, we learned that after nearly six years Mr. Summers will be leaving the board of LendingClub. He is being replaced by leading economist and Stanford professor Susan Athey. While she is not nearly as well known as Larry Summers she still brings serious economics clout to the board.
She is the Economics of Technology Professor at Stanford Graduate School of Business. In 2007, she was awarded the prestigious John Bates Clark Medal for the best American Economist under the age of 40. Her recent academic research and teaching focuses on platform competition, financial technology, the impact of the internet and social media on consumer behavior, and new econometric methods for analyzing big data. Interestingly, she also sits on the board of travel marketplace Expedia as well as blockchain startup Ripple.
According to LendingClub’s press release here is what Professor Athey had to say about joining the board:
What drew me to LendingClub is quite simply the model. A digital marketplace that connects borrowers with investors to simplify access to credit benefits both sides and provides real value. I’m excited to apply my expertise to improving the efficiency of financial services.
There was no reason given as to why Mr. Summers left the board but I don’t think we should read too much into his departure. While Professor Athey has joined the board as of this month, Mr. Summers will stay on through the annual shareholder meeting which is typically held in June.
Larry Summers not only helped put LendingClub on the map but he gave the entire industry some serious credibility in its early days. I am also personally very grateful to him for agreeing to speak at LendIt USA 2015 when we were still a very young conference. He spoke for free, foregoing his normal six figure speaking fee, and he gave a rousing speech about the future of the lending business to a packed house of LendIt attendees.
Having such a high profile person involved in our industry in its early days was just what we needed. While at times he has been a divisive figure he gave a nascent company and industry more credence. Today, online lending is very much mainstream with dozens of players including some of the largest banks on the planet. We probably would not be where we are today without the involvement of Larry Summers.
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.