LendingClub Is Ruining It for the Rest of Fintech

  • Scandal complicates conversations with regulators, lawmakers
  • Executives are quick to explain differences between companies

Washington lobbyists for online lenders have a new challenge: LendingClub Corp.

Scandal, fleeing investors and a subpoena at the high-profile financial-technology firm aren’t the only bumps in the road. A U.S. Treasury report last week recommended stricter scrutiny of fintech firms, which have mostly been regulated until now only on the state level. In recent weeks, a major bank stopped buying debt from Prosper Marketplace Inc. and losses mounted at On Deck Capital Inc.

All that woe made it tougher for executives like Kathryn Petralia of Kabbage Inc. to argue that the industry should be spared from rules that would make it more difficult to lend on the Internet to small businesses…

LendingClub Is Ruining It for the Rest of Fintech

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