LendingClub LCX Platform Allows Investors Access to Loans

LendingClub says it is expanding access to personal loans by extending the capabilities of its LCX electronic trading platform to include LCX Link.

“This innovation opens access and removes friction for institutional platform investors, allowing them to automatically purchase, sell and settle loan transactions through LCX without the need for technology infrastructure or ability to build connectivity,” the company said in an announcement on Friday (Sept. 10).

LendingClub says it expects to execute $2 billion in total sales through LCX by the close of the third quarter of 2021.

LCX swaps manual processes for a digital platform, enabling variable loan sale pricing, including the ability to sell loans above par and an automated auction tool that lets investors bid for and purchase loans from LendingClub that match their attributes.

Until now, LCX was available solely through an API. LCX Link lets banks and other institutional investors connect and purchase loans that match their risk-return profile, no matter their in-house technology infrastructure.

“We continue to leverage technology to grow our marketplace, and LCX Link is a key capability that has helped bring in multiple investors who are pleased with the speed at which we’re innovating to increase access to this asset class,” said Clarke Roberts, VP of marketplace services at LendingClub. “The efficiency we’re enabling, combined with our scale, increases accessibility and enhances transparency for investors, which ultimately drives new and more competitive products for our members.”

LendingClub says it expects to expand LCX in the fourth quarter to allow for client-to-client portfolio sales through its secondary market. LCX will also improve LendingClub’s ability to gauge investor appetite for new products and eventually expand credit to new or previously underserved borrowers.

Read more: LendingClub CEO Says Breadth of Consumers Living Paycheck to Paycheck Is ‘Wake-up Call’

Earlier this week, LendingClub CEO Scott Sanborn spoke to PYMNTS’ Karen Webster about data that shows 40% of people who make around $100,000 a year still live paycheck to paycheck, along with the 54% of American households dealing with the same struggle.

“The data should be a wake-up call, not only for all of us in the industry, but also for the policy-makers in Washington and for the regulators,” Sanborn said.