LendingClub supports Small Business Truth in Lending Bill introduced in the US House and Senate
SAN FRANCISCO, November 18, 2021 / PRNewswire / – LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America’s leading digital marketplace bank, approved a bill that was published today in The United States House and Senate, who would extend the transparency standards of federal law on truth in lending to small business finance.
“Small business owners deserve transparent disclosure of the price they would pay for a loan, quite simply. Chair Velazquez and Senator Menendez advocate support for small business owners and a more transparent, responsible and potentially innovative credit system for small businesses. ” Louis Caditz-Peck, Public Policy Director at LendingClub.
Since 1967, the Truth in Lending Act has established transparent disclosure of the prices and terms of credit to consumers. But the truth in lending law does not apply to most small business finance, and less transparent pricing practices have emerged in recent years. Research by LendingClub partner Accion Opportunity Fund has found that small businesses pay APRs of up to 358%, often without these rates being clearly communicated to the small business borrower. The payments billed to the small businesses in the study were, on average, nearly double what the business could afford.
“We look forward to working with lawmakers on both sides of the aisle on this bill to help small businesses recover and to encourage innovation in small business lending. LendingClub has shown that innovation can drive prices down, but customers only benefit small businesses when they can easily compare prices on offer. Truth in Lending standards are violated in the marketplace today, and small businesses are literally paying the price, “said Caditz-Peck.
The Small Business Lending Disclosure Act was introduced by Chair Velazquez and Senator Menendez and endorsed by the Chair of the House Financial Services Committee Maxine Waters, Chairman of the House of Representatives Subcommittee on Consumer Protection and Financial Institutions Ed Mother of Pearl, Senate Committee Chairman on Banking, Housing and Urban Development Sherrod Brown, and Chairman of the Senate Committee on Small Business and Entrepreneurship Ben Cardin. In addition, it was supported by the Responsible Business Lending Coalition (RBLC), the LendingClub 2015 together with non-profit Community Development Financial Institutions (CDFI), small business interest groups and for-profit fintech partners such as Funding Circle, Accion Opportunity. founded Fund, Opportunity Finance Network, Small Business Majority, Community Investment Management and the Aspen Institute.
The Small Business Lending Disclosure Act is based on similar transparency laws for financing small businesses that the LendingClub and the partners of the Responsible Business Lending Coalition passed with overwhelming, non-partisan support California in 2018 and new York in 2021. Similar laws were also introduced in for consideration North Carolina, New Jersey, Maryland, and Connecticut.
LendingClub’s small business financing products include SBA and other commercial loans, as well as unsecured online loans, offered in partnership with the Accion Opportunity Fund and Funding Circle. An analysis of LendingClub’s small business loan program found that compared to traditional bank loans, there are five times as many minority-owned companies as women-owned companies.
LendingClub Corporation (NYSE: LC) is the parent company of LendingClub Bank, National Association, a member of the FDIC. LendingClub Bank is the leading digital marketplace bank in the United States, giving members access to a wide range of financial products and services that help them pay less when they borrow and earn more when they save. Based on more than 150 billion data cells and more $ 68 billion For loans, our AI-driven loan decision and machine learning models are used throughout the customer lifecycle to provide our members with seamless access to loans while delivering compelling risk-adjusted returns for our loan investors. As of 2007, more than 3.8 million members have joined the club to help meet their financial goals. You can find more information about LendingClub at https://www.lendingclub.com.
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SOURCE LendingClub Corporation