Marketplace lending

The idea that restricted access to loans for poor-credit borrowers is unequivocally a bad thing is based on industry talking points that don't stand up to real-world scrutiny.

LendingClub, the online loan platform looking to restore investor confidence, is in talks with Citigroup to arrange more funding for the debts it arranges, according to a person with knowledge of the matter.

The Obama administration and an independent federal banking agency are advising the Supreme Court not to review a lower-court ruling that has roiled the marketplace lending sector and caused consternation throughout much of the consumer finance industry.

During the ascension of marketplace lending, banks responded to the competitive threat in several different ways. Now some banks are better positioned than others to take advantage of the online sector's recent woes.

The nascent industry's early success will mean very little if these new companies don't take necessary steps to position themselves for the long term.

Banks and nonbanks should accept that more fintech regulation is inevitable, but how far regulators go will depend in part on how well companies demonstrate they are managing risk.

One of the country's largest online lenders is cutting jobs and shelving expansion plans in response to investors' rapid retreat from the beleaguered sector.

New York's bank regulator is investigating LendingClub Corp. over loans issued to consumers and its relationships with financial institutions, saddling the embattled company with another probe after its chief executive was forced to resign earlier this month.

Following the scandal-tinged departure of CEO Renaud Laplanche, the company is contemplating drastic steps to restore the confidence of loan buyers. Scenarios that would have been far-fetched a short time ago — such as diluting shareholders and funding loans off its own balance sheet — are now under consideration.

Prosper Marketplace Inc. has met with investors including Fortress Investment Group about potential capital injections, according to a person with knowledge of the matter.