“We have been working on Member Center for the customers for the past year, but the pandemic forced us to fast track the project to meet with our demand today,” said Anuj Nayar, LendingClub’s financial health officer. While the pandemic has forced the company to rejig its technology roadmap, LendingClub is still on track to acquire Radius Bank by the second quarter of 2021, he added. The acquisition was initially announced in February, this year.
The Member Center provides consumers with a one-stop shop to manage their finances and offers three main solutions: a debt-management tool called “Credit Profile,” tech partnerships to give consumers better control over their finances, and deferred and partial payment plans. San Francisco-based LendingClub has facilitated north of $50 billion in loans since its inception in 2007, most recently originating $2.5 billion loans in the first quarter, according to a recent earnings report.
“We have been testing Credit Profile, a tool of Member Center, which is just a one-stop shop to see all your debt,” Nayar explained. “It helps consumers prioritize payments in accordance to their income-to-debt ratio.”
Credit Profile, designed and developed by LendingClub, has been in beta testing for “quite some time,” Nayar said, and is now being integrated with the Member Center to educate borrowers about their credit.
“Over 200,000 users have already registered for the Credit Profile tool and we expect the number to rise when Member Center is released to all our customers,” Nayar said, adding that LendingClub has more than 3 million active users.
Member Center will also provide advice to people doing freelancing gigs while quarantined at home. LendingClub has partnered with Steady, a mobile app that lets users access a platform listing part-time, hourly and on-demand work opportunities. LendingClub has partnered with Trim, a company that helps customers negotiate bills from service providers, which LendingClub said can save customers $156 per year.
The third feature of Member Center is a deferral payment plan for customers. Although the majority of customers remain current on their payments, LendingClub offers partial payment structure or deferred payment plans, potentially attractive options during the current economic crisis.
“We saw that customers that got a deferral plan in the 2008 crisis were more likely to pay back their debts,” Nayar explained. “In early March this year, we acted quickly and allocated our resources to help our existing consumer base in this crisis.”
LendingClub strategically pulled back from new originations since the start of the crisis, he said, citing that borrower demand and investor appetite are not syncing in these times. As such, LendingClub’s originations dropped by 90% year over year in the second quarter, while delinquencies have stayed relatively the same.
“We were quick to act and provide our customers with partial and deferral payment plans, which helped us keep our delinquencies relatively low,” Nayar said. “We anticipated that our investors are going to pull back because it’s so difficult to price risk in an environment which is so unprecedented.”