Lending Club, which has been struggling to recover from loan errors and the departure of its Chief Executive (among other issues), has named Patrick Dunne, a veteran of BlackRock, as its new chief capital officer.
Under this role, Dunne will be responsible for dealing with individual investors, banks, endowments, strategic partners and retail distributors. Dunne is well known in financial circles and his appointment is seen as a boon to the beleaguered Lending Club.
Dunne’s appointment comes as the online lending platform struggles from the departure of its CEO Renaud Laplanche, who was pushed out in May after the board learned through an internal investigation that Laplanche didn’t report errors related to a sale of loans, nor did he disclose personal investment in an outside fund. The former CEO was also charged with inflating monthly loan volumes back in 2009 by giving the loans to family. Lending Club has also been busy trying to find buyers for its loans in the weeks since the improper lending practices were brought to the forefront. Jefferies Group ended its relationship with Lending Club in part because of the CEO issues, as did Goldman Sachs.
The hope is that with Dunne, Lending Club will be able to win back the trust of its different constituents. Dunne most recently was in charge of BlackRock’s San Francisco office. Last month, Lending Club warned second quarter loan volume would come in about one-third less than the $2.75 billion it had in the first quarter of 2016. The company also said revenue and profit growth at the company isn’t likely to resume until the beginning half of next year. The company is planning to spend more money on incentives to get investment funds to increase their loan purchases and as a way to keep employees from jumping ship.
Since the woes at Lending Club have come to light, rumors have abounded that the FinTech company would look to sell itself. A report surfaced last month that the former CEO was in talks with private equity firms and banks to take the company private.