The Ledger
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Laplanche: Low fintech costs and cheap bank capital reduce credit costs
“It's really the best of both worlds where platforms like us, like ours, have a low cost of operation, and the banks have a low cost of capital, and when you put these two together, you can really drive down the cost of credit for consumers and businesses.”
Laplanche: Lending Club's expense ratio is under 2% vs banks' 5-7%
“That ratio for most banks is between five and seven percent, so it's really all operating costs divided by total loans outstanding, that's between five and seven percent. The same metric at Lending Club is less than two percent, and it's coming down quarter af…”
Laplanche: Lending Club averages 12.5% borrower rates and 8% investor returns
“So LendingClub, in contrast, as an average interest rate just over 12 and a half percent and on, on the so that's the value to borrowers and as return on average close to eight percent net return after fees and after credit losses to investors.”
Laplanche: Lending Club is not sensitive to rising interest rates
“So yeah, as far as we're concerned then, we don't think we're rate sensitive at all.”
Laplanche: Lending Club takes no balance sheet risk on loans
“We don't take a balance sheet risk. The, all the capital comes from the from the investors.”
Laplanche: US credit cards average 17% while savings yields near 0%
“The cost of the average cost of a credit card in the US, so the credit, average credit card interest rate is just shy of 17%. So that's really the value delivered to borrowers. On the flip side if you sort of go and deposit money on high yield savings account …”
Laplanche: Lending Club caps annual growth at 150% to manage risk
“So we've been controlling growth to a place where it's in between hundred and 150%. We could be growing faster based on supply and demand available to us but we've chosen to Sort of grow at the current pace as a matter of sort of controlling risk and especiall…”
Laplanche: Lending Club sees higher loan fraud rates on mobile than PC
“We, we've seen a much higher fraud rate on mobile and tablet than on PC and laptop.”
Laplanche: Fraud detection relies on correlation rather than causality
“In terms of fraud, we're really trying to correlate different data points without necessarily looking for a causality. What matters is, is correlation in this case.”
Laplanche: Lending Club detects higher mobile loan fraud on Android than Apple
“We've seen a higher fraud rate in terms of mobile OS with Android than Apple.”
Laplanche: Fraud deterrence requires being harder to target than competitors
“What really matters is not to be smarter than the fraudsters, it's to be smarter than the next guy”
Laplanche: Lending Club consumer rates average around 12.5 percent
“Our rates start, ah, in the single digit, so it's six, six and a half percent for consumers, 5.9 for businesses, ah, and the average is in the low teens, so about 12, 12 and a half percent.”
Laplanche: Lending Club receives about 9,000 loan applications daily
“There's about nine, 9000 applications coming to us during that day.”
Laplanche: Lending Club faces under 10 fraudulent applications daily, totaling $140,000
“It's less than 10 loans out of a population of 9000. That happens every day, and so it's, it is a needle in a haystack, ah, but it is really material because there's sort of 10 or so fraudulent loan applications represent a total of about 140,000 dollars.”