The lending club hits $3 billion in loans granted

by. Bill Vogeney

In case you missed the announcement earlier this year, Google invested $125 million in Lending Club, a peer to peer lender in business since 2007. In my email inbox this morning, I saw this article: http://finovate.com/2013/12/lending-club-tops-3-billion-mark-for-personal-loans-originated.html . This article illustrates just how much pressure credit unions are under from all angles: loss of non-interest income from interchange, regulatory and legislative demands and of course, new entrants to the lending market. The personal loan, arguably the foundation on which credit unions were built, could be a market that is slipping from our grasp. Earlier this year, the Member Resource Committee developed a white paper Fighting for our Turf, Threats to Credit Union Small Loan Markets, as a way of educating the membership on the changing lending environment. If you haven’t downloaded the white paper, you can do so here:

http://www.cunacouncils.org/membershared/download/clc/wpfightingforour_turf.pdf

Over the last two years, my credit union has undergone a renewed emphasis on the personal loan, and we’ve managed to triple the size of our unsecured portfolio during this period of time. We’ve utilized a variety of ideas, including multiple pre-qualified personal loan offers, a revised personal line of credit product, lower rates to borrowers with FICO scores above 660, and loan closings utilizing electronic signatures to achieve maximum efficiency.  I suggested that personal loans are the foundation on which credit unions were built, but I also believe personal loans are the foundation for your lending department. Regardless of opportunities in mortgage lending and member business lending, I firmly believe if your foundation (personal loans) is weak, the rest of your loan portfolio and loan granting efforts will be compromised.

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