3 Key Takeaways on Consumer Credit from Our Chief Capital Officer

April 17, 2019

Recently Valerie Kay, LendingClub’s Chief Capital Officer, spoke at an industry conference about trends in consumer credit and implications for the marketplace lending industry. Below, are key takeaways:

1. Younger consumers are accessing credit in different ways

Millennials represent about 25% of overall buying power in the U.S. Yet, according to a recent TransUnion study, just 50% of millennials own credit cards versus 75% of Gen Xers. The availability of credit is an issue for the younger generation, and they need alternative lending products to build their credit history. LendingClub believes we’re entering an age of customization, where consumers will look for products that fit their needs better than traditional options.

2. Data plays an important role in marketplace lending

As the largest provider of unsecured consumer loans in the U.S., LendingClub has a unique view into consumer trends and behaviors. LendingClub uses its 10-year history of working with borrowers, a customer base of over 2.5 million people, and rigorous testing (such as around pricing and loan size) to help keep us educated about consumer behavior. We stay close to our customers to understand what they need and to offer the best help we can. As a case in point, the payment plans LendingClub facilitated in the wake of natural disasters such as Hurricane Florence (and the recent government shutdown) enabled us to help a lot of people navigate tragic situations while staying current on their loans.

3. Plan for economic shifts

With unemployment near rock bottom levels1 and payrolls on the rise,2 consumers appear to be very healthy. Still, economists point to a recession as a question of when, not if. At LendingClub, we are focused on building products and services to help borrowers and increase platform resiliency. For example, an extra functionality was added recently to enhance our ability to identify borrowers more likely to default early in their loan cycle.

Additionally, as part of our ongoing efforts to anticipate and react to changes in the economic environment and in our customer base, we consider short- and medium-term factors including consumer sentiment, jobless claims, the unemployment rate, and wage growth. We also digest financial market statistics, such as spreads on investment grade and high yield bonds, and stock market returns, to get a feel for how they interact to affect consumers. And we partner with third parties such as Moody’s Analytics, to give economic context and data to our credit teams.


Valerie Kay is the Chief Capital Officer at LendingClub, responsible for overseeing the Investor Group. Valerie brings more than 25 years of capital markets experience across a broad range of consumer asset classes. She previously served as LendingClub’s Senior Vice President and Head of Institutional Investors. Prior to that, she spent 20 years at Morgan Stanley, including 12 years as a Managing Director, holding several leadership roles within Global Capital Markets, including Deputy Head of Asset Finance, Head of Structured Asset Monetization, and Head of Mortgage Finance.

1. Source: U.S. Bureau of Labor Statistics, “Civilian Unemployment Rate, seasonally adjusted,” https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm.
2. Source: U.S. Bureau of Labor Statistics, “Current Employment Statistics,” https://www.bls.gov/opub/ted/2019/real-average-hourly-earnings-increase-1-point-7-percent-over-the-year-ending-january-2019.htm.

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