Identity verification is a critical fraud prevention tool used by banks, credit card companies and other lenders.   Lending Club has recently begun to leverage the information available on social networks to help confirm a potential member’s identity.

We continue to rely on methods of identity verification used by traditional lenders, but in an era of online identity theft, Lending Club is continually redefining industry best practices.

We cannot disclose our exact methodology, practices, or sources of information, as this could simply empower the fraudsters we are trying to disarm. But what we can say is that we use information gathered from social networks to help give us more confidence that a member is in fact who they say they are.
When we do find a case of identity theft, we work with the true owner of the identify and law enforcement authorities to track down and prosecute anyone who has committed identity theft.  In addition, we will reimburse lenders for the unpaid principal balance of loans where we have confirmed that the borrower has committed identity theft.

As a financial services innovator, Lending Club is constantly assessing new methods to better secure our platform.  Identity confirmation measures are simply a next step in the evolution of financial services.
Our member’s privacy is our top concern.

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I'm pleased to share the news that Lending Club has officially reached half a billion dollars in loan demand. This means that people have applied for over $500 million dollars in loans at LendingClub.com. Given our selective credit criteria, we've approved only a portion of those loans, a little over $50 million, and have issued over $45 million in loans to date to creditworthy individuals.

As always, our focus is on offering better rates for creditworthy borrowers and better returns for investors because Lending Club eliminates the high cost and complexity of traditional banks. Many thanks to our growing member base--our financial community is fulfilling its mission, and growing bigger and better every day.

Another company in our space, Prosper.com, recently completed its SEC registration. As you know, we were the first in the category to do this back in 2008. We made that decision proactively because we understood the importance of transparency and compliance. We would now like to congratulate our friends at Prosper.com on completing their own registration. We are pleased that others are taking the same steps as Lending Club, and believe full transparency and disclosure benefit both consumers and the industry overall.

Dear Lending Club Members,

As more of you are saying “no” to credit cards and are choosing the path of responsible credit, and as more investors look for higher returns after last year’s devastating stock market performance, our financial community is showing better results than ever.

This week we are releasing new data showing strong growth among both Lending Club investors and loan originations:

• From January 1st to May 31st 2009:
  • 60% growth in total loans issued by Lending Club, from $25M to $40M
  • 70% growth in total Lending Club membership from 82,000 to 140,000
  • 72% growth in loan applications, from $212M to $365M
• The average net annualized return earned by Lending Club investors since June 2007 grew from 9.05% as of December 18, 2008 (as reported by analyst firm Javelin Research at that time) to 9.90% as of today.

These excellent results demonstrate the responsible behavior of our community of investors and borrowers and show that in the long run, sound underwriting and cautious investment beat the most aggressive strategies.

Better Rates, Together.

Renaud

On Tuesday evening, we made a set of scheduled enhancements to our Web site like we do every month. On Wednesday, the combination of the site enhancements and record-setting levels of activity on certain pages, led to issues that prevented some pages from loading for part of the day.

We know that some customers visiting our Web site on Wednesday either could not access their account or had difficulties with certain areas of the site. We immediately focused our efforts on addressing the issues and believe we have resolved them. I just want to note that our Web site and customer data have remained fully secure and all account details for both borrowers and investors were fully updated on schedule.

As the popularity of Lending Club continues to grow, I want you to know that we are completely focused on giving consistent, anytime access to the lending platform and your account information.

If you were affected by this issue yesterday, I would like to sincerely apologize. Thank you for your continued support.

Best,

Renaud