Marketplace lending

LendingClub Corp., which plunged 51 percent last week after the surprise departure of its leader and disclosure of faulty internal controls, said the scandal is prompting investors to suspend debt purchases and spurring government probes.

Too many fintech companies are selling superficial products. Entrepreneurs need to start solving hard problems and offering real value.

BancAlliance, a network of community banks that has been snapping up loans from LendingClub, is weighing whether to suspend purchases on the online platform after the company said it's overhauling internal controls.

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Digital upstarts that seemed on top of the world a few months ago have suffered a series of setbacks of late that raise questions about their long-term survival. Here's a look at the developments that have brought some once-high-flying online lenders back to earth.

Say what you will about these companies' longevity, were it not for the likes of Lending Club you wouldn't see banks like Wells Fargo introducing expedited loan products.

Questions swirling around LendingClub's leadership shakeup this week are threatening to compound a concern already weighing on its stock: Will investors keep snapping up its loans?

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said marketplace lenders might find that sources of funding evaporate during a downturn.

Key factors point to marketplace lenders rebounding from their recent setbacks and continuing their growth.

In the weeks leading up to the resignation of LendingClub's chief executive officer, investment bank Jefferies Group asked the company to bolster its disclosures to borrowers, people with knowledge of the matter said.