We announced back in April that we were starting a registration process with the U.S. Securities and Exchange Commission (SEC) that required us to go into a quiet period. Thank you all for your feedback and support during that period.

Today, we’re delighted to announce that we have completed this process and are now available to both borrowers and lenders. We believe that this SEC registration is a major step forward for the Lending Club community and social lending in general, as it helps establish the space as a investment alternative to the traditional debt instruments and credit products offered by large financial institutions.

What does this registration mean for you, the lenders and borrowers?

• Under the registered offering, Lending Club lenders will now invest in notes that correspond to portions of loans made to borrower members. The notes have stated interest rates ranging from 6.69 percent to 18.63 percent, after a 1 percent service charge is applied.
• By partnering with FOLIOfn Investments, Inc., a registered broker dealer, Lending Club becomes the first social lending network where lenders have the option of a trading platform. On the trading platform, lenders who become customers of FOLIOfn will be able to put notes up for sale in the event they need liquidity before the completed term of a note.
• We believe this will accelerate the mainstream adoption of social lending, which will help more borrowers get funded faster.

The current financial crisis is creating mounting consumer distrust of large financial institutions and causing people to demand an alternative that gives them more control over their personal finances and investments. Lending Club is leading the charge to deliver that alternative by providing a network where lenders can fund loans posted by borrowers.

The Lending Club community has continued to show exceptionally responsible borrowing behavior over the last 18 months, demonstrated by the fact that since May 2007 the default rate has remained lower than 2 percent.

At a time when the financial landscape makes our community even more useful to both lenders and borrowers, we are thrilled to be able to accept new lenders again.

The prospectus filed with the SEC is available here.

Social lending is getting increasingly mainstream media coverage. As Rate Ladder reported yesterday, peer to peer lending received prominent placement in Forbes Magazine and CNBC over the last few days.

Our CEO, Renaud Laplanche, was interviewed on CNBC’s Power Lunch program earlier this week to explain how social lending is helping people across America lend and borrow money at better rates.

A week earlier, CNBC’s The Big Idea with Donny Deutsch had a segment that highlighted person-to-person lending as a great financing alternative. You can read about that segment on The Big Idea Blog to get their take on social lending, and on Lending Club in particular.

To round up the week, we were pleasantly surprised to find that Lending Club was mentioned in the cover story of last week’s issue of BusinessWeek.

Social lending is rapidly gaining mainstream adoption, and this is excellent news for the Lending Club community.

Better Rates. Together.

With 18 days to go until we reach the end of our 5% Cash Bonus program, we want to update everyone on our progress:

• Our growth has been fantastic! We have reached $6MM in issued loans, and have over $3MM of loans in funding today, so our loan volume is growing extremely well

• Our lender base is growing as well – the number of lenders has doubled in the last month alone

• Our next system release (due in the next few days) also offers a great new set of lender tools that makes lending and account management even easier and incorporates feedback from many in our lending community

With all of the growth in loans and loan requests, we want to reach out as widely as possible to current and now prospective lenders with our special offer: Lending Club will give a 5% cash bonus to all lenders who lend $5,000 or more between December 14, 2007 and February 3, 2008. This bonus can be used to lend or can be withdrawn to your linked checking account. There are no special sign-ups needed to participate in this program.

Click here to read the program details.

Better Lending. Together

We are pleased that we have recently earned the Better Business Bureau’s designation as a Reliable Online Business, certifying that Lending Club meets the BBB’s high standards for ethical online business practices.

We are committed to providing a safe and transparent platform where you can conduct business as borrowers and lenders. As a proud Reliable Business, Lending Club abides by the BBB Code of Online Business Practices and is dedicated to the principles of sound online advertising and selling practices that are exemplified by participants in this distinguished program. These principles include a strong commitment to truthful and accurate communications, full disclosure about Lending Club transactions, stringent privacy and security practices to safeguard personally identifiable information, and excellent customer service.

For more information, we encourage you to read about these principles in greater detail on the BBB website.

Better Business. Together.

In free markets, prices vary with supply and demand, and Lending Club is no exception. Until now, the Lending Club social lending community has enjoyed a near-perfect equilibrium of supply and demand, with funds available to lend slightly exceeding qualified loan applications.

The relaunch of our Facebook application and the addition of other online communities in early December, immediately followed by a National Launch with new loan applications flowing in from California, Texas, Illinois, Michigan and a few other states has increased demand (loan applications) faster than supply (lenders’ lending capital). As a result, we will increase our base rate tomorrow from 6.80% to 7.30%. This page will update to reflect the new rates: http://www.lendingclub.com/info/how-we-set-interest-rates.action.

As an example, a borrower with a 705 FICO score and a 20% DTI currently pays an interest rate of 12.17% for a $20,000 loan. Starting tomorrow, that same borrower would pay 12.67% for a new loan of the same size.

All Lending Club loans are fixed-rate, so the rate hike will only apply to new loan listings. The average return of all Lending Club lenders after 6 months now stands at 12.2% after fees and losses. Monday’s half-point rate hike will help lender returns while maintaining the high percentage of borrowers getting fully funded (currently at about 90%).

As we continue to collect more data and understand the platform’s behavior in different circumstances, the rate-setting mechanism will be established systematically based on real-time supply and demand.

We believe tomorrow’s rate hike is good for both lenders and borrowers: lenders will earn a better return and borrowers’ loan listings should get funded faster. The rate paid by Lending Club borrowers remains on average 25% lower than the average credit card rate, which stands at 15.24%.

Better rates and better returns. Together.