The online loan marketplace Lending Club has formed a partnership with a nationwide network of community bankers.
The partnership with BancAlliance, a network of community banks that claims 200 members in 39 states, will allow the banks to provide co-branded personal loans as well as purchase consumer loans. The banks will focus first on directing their customers who need smaller loans towards Lending Club's platform, and then on purchasing loans from national pools that fit established borrower criteria.
BancAlliance was founded in 2011 to enable community banks to compete with larger banks on the national level. Its members have total assets ranging from $200 million to $10 billion, according to the press release announcing the deal.
Lending Club's lower overhead costs allow it to service loans at a cheaper rate than traditional lending institutions, and the partnership will provide technology to enable nationwide loan servicing and purchases that community banks could not have done on their own, according to Brian Graham, the chief executive officer of the company that manages BancAlliance.
"Community banks are the lifeblood of American communities," Renaud Laplanche, the CEO of Lending Club, said in the release. "This program will help them level the playing field with national banks by offering affordable, consumer-friendly loans to their customers."