LendUp is seeking to differentiate itself from competitors by making fast loan decisions and designing its customer experience around the mobile phone.
Sponsoring securitizations of the loans funded on its platform will give Lending Club more control over its reputation in the market and make it less beholden to direct loan buyers.
Operational changes may be enticing to investors, but they threaten the very foundation of marketplace lending, potentially shutting out those the burgeoning sector was meant to serve.
The online lender, which focuses on high-earning millennials, is offering assurances that it will also serve Americans who make less money. But the company has not convinced critics, who say the plans are inadequate.
Two of the biggest online consumer lenders don't always check whether borrowers are lying to them, and if they find errors in an application, they may still approve the loan.
The New York firm, which offers high-cost credit to small businesses, has attributed its recent struggles to certain loans performing worse than had been expected.
JPMorgan Chase’s partnership with OnDeck Capital was expected to augur a wave of similar agreements between banks and online business lenders. But so far, most banks have avoided joining forces with companies they also view as competitors.
