SAN FRANCISCO, November 18, 2021 / PRNewswire / – LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, the leading digital marketplace bank in the United States, approved a bill introduced today in United States House and Senate that would extend the transparency standards of the federal Lending Truth Act to small business finance.
âSmall business owners deserve transparent disclosure of the price they would pay for a loan, outright. President Velazquez and Senator Menendez stood up to support small business owners and a more transparent, accountable and potentially innovative small business lending system âmentioned Louis Caditz-Peck, Director of Public Policy at LendingClub.
Since 1967, the Truth in Lending Act has established transparent disclosure of the prices and terms of consumer loans. But the Truth in Lending Act doesn’t apply to most small business finance, and in recent years less transparent pricing practices have emerged. Research by Accion Opportunity Fund, a LendingClub partner, found that small businesses were paying APRs of up to 358%, often without these rates being clearly disclosed to the small business borrower. Payments billed to the small businesses in the study were, on average, nearly double what the business could afford to pay.
âWe look forward to working on this bill with lawmakers on both sides of the aisle to help small businesses recover economically and to encourage innovation in small business lending. LendingClub has shown that innovation may drive down prices, but it only benefits small business customers if they can easily compare the prices offered to them. The standards of truth in lending are not met in the market today. hui, and small businesses are literally paying the price, âsaid Caditz-Peck.
The Small Business Loan Disclosure Act was introduced by President Velazquez and Senator Menendez and co-sponsored by the Chair of the House of Commons Financial Services Committee. Maxine Waters, Chairman of the House Subcommittee on the Protection of Consumers and Financial Institutions Ed Perlmutter, Chairman of the Senate Banking, Housing and City Commission Sherrod Brown, and Chairman of the Senate Committee on Small Business and Entrepreneurship Ben cardin. In addition, it was supported by the Coalition for Responsible Business Lending (RBLC), which LendingClub co-founded in 2015 with non-profit community development financial institutions (CDFIs), small business advocacy groups and for-profit fintech partners, including Funding Circle, Accion Opportunity Fund, Opportunity Finance Network, Small Business Majority, Community Investment Management and the Aspen Institute.
The Small Business Lending Disclosure Act is based on similar laws on small business finance transparency that LendingClub and the partners of the Responsible Business Lending Coalition pushed through with overwhelming bipartisan support in California in 2018 and new York in 2021. Similar laws have also been introduced for consideration in North Carolina, New Jersey, Maryland, and Connecticut.
LendingClub’s small business finance products include SBA and other business loans, as well as unsecured online loans offered in partnership with Accion Opportunity Fund and Funding Circle. An analysis of LendingClub’s small business lending program found five times the representation of minority-owned businesses and four times the representation of women-owned businesses, compared to conventional bank lending.
LendingClub Corporation (NYSE: LC) is the parent company of LendingClub Bank, national association, FDIC member. LendingClub Bank is the leading bank in the digital marketplace in the United States, where members can access a wide range of financial products and services designed to help them pay less when they borrow and earn more when they save. Based on over 150 billion cells of data and more 68 billion dollars in lending, our AI-powered credit decision and machine learning models are used throughout the client lifecycle to expand our members’ access to credit, while generating risk-adjusted returns compelling for our loan investors. Since 2007, more than 3.8 million members have joined the Club to help them achieve their financial goals. For more information on LendingClub, visit https://www.lendingclub.com.
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SOURCE LendingClub Corporation