LendingClub Corporation
San Francisco, California
In July 2021, the Federal Trade Commission announced that LendingClub agreed to pay $18 million to settle FTC charges that the fintech lender deceived consumers by telling them they were approved or pre-approved for loans with specific terms, while failing to adequately disclose that origination fees would be deducted from the loan amount. The settlement addressed allegations that LendingClub's practices violated the FTC Act by misrepresenting the total cost of loans to borrowers. While LendingClub transitioned from a pure fintech marketplace lender to a chartered bank (acquiring Radius Bank in 2021), this action pertains to its fintech lending operations. The case illustrates regulatory scrutiny of fintech lending practices, particularly around fee transparency and consumer disclosures.
Verified from source: LendingClub Corporation agreed to pay $18 million to settle FTC charges that the company deceived consumers about hidden fees and misrepresented whether loan applications were approved. The settlement bars LendingClub from making misrepresentations and requires clear disclosure of fees.
- Fintech lenders face FTC enforcement for deceptive fee disclosures even as they transition to bank charters
- BaaS platforms facilitating lending must ensure transparent fee disclosure throughout the borrower experience
- Regulatory actions can follow fintech companies through corporate transitions including bank charter acquisitions
- OfficialFTC Press Release