LendingClub (LC) Q3 2016 Earnings Call

posted in: Earnings Call, Notes | 0

Scott Sanborn – President and Chief Executive Officer

They are taking measures against some borrower behaviours.

“…we raised rates four times and tightened credit three times based on trends we were seeing in borrower behavior and investor expectations. In particular, we stopped approving loans to a portion of borrowers that was exhibiting a high propensity to accumulate debt and could have the most exposure to an economic slowdown. The vintages that included these underperforming populations are still expected to deliver solid returns.”


On auto-lending trends and practices

“For most people, their car is the second largest purchase they make and tens of millions of Americans borrow over $0.5 trillion every year to buy cars. The practices and processes of the auto lending industry are not as transparent as we think they should be and many people, especially those getting used car loans, are paying more for their loan than they need to. People negotiate the price of their car, but often not the price of their financing and are unaware of the extra costs out at the dealership. And unlike mortgages, where refinancing is common, people aren’t generally aware that they can refinance their car loan to obtain savings.”