Between the proliferation of lenders at FinovateSpring 2014 demoing in San Jose last week, and today’s funding announcements from alums Prosper and Kabbage, it is clear that lenders in the 21st century will continue to demand their space in the fintech headlines.
Today brings news that Lending Club has reached a deal that will allow Union Bank to sell loans from Lending Club. The two organizations will also work together to develop new credit products and services to be made available to customers of both companies. In a press release, Lending Club cited the combination of its low operating costs and Union Bank’s “strong balance sheet and large customer base” as one of the synergies contributing toward the deal.
One key question is what sort of new credit products are Lending Club and Union Bank discussing? Details remain few and far between as this point. But this could be a significant development. It has been a goal of Lending Club to sell its loans to banks and other financial institutions. But the potential of a customer-facing link to Lending Club at FIs like Union Bank would be a very worthwhile opportunity for the P2P lender.
Union Bank is the primary subsidiary of UnionBanCal Corporation, a financial holding company with assets of more than $107 billion. Union Bank operates more than 400 branches in seven states in the U.S., as well as two international offices.
The partnership between Lending Club and Union Bank was announced at the LendIt 2014 conference in San Francisco on Monday. The arrangement represents the largest such partnership Lending Club has inked to date, and comes in the wake of Wells Fargo’s decision to reverse, or at least clarify, a policy that banned its employees from participating in P2P lending platforms.