Union Bank has entered into a strategic alliance with Lending Club, a peer-to peer lending marketplace provider that connects creditworthy borrowers with investors.
Union Bank, a unit of the $107 billion-asset UnionBanCal in San Francisco, will buy personal loans from Lending Club. The bank and Lending Club said in a press release Monday that they also agreed to work together to create credit products that will be made available to their customers.
Union Bank specializes in financial services to individuals, small businesses, middle-market companies and large corporations. It has more than 420 branches in California, Washington, Oregon, Texas, Illinois, New York and Georgia.
This relationship brings together Lending Club's low operating cost and Union Bank's strong balance sheet and large customer base, James Francis, the bank's head of consumer lending, said in the release. The agreement "will allow Union Bank to invest in high-quality assets and bring new products to our customers who will benefit from Lending Club's customer experience and innovation," he added.
Lending Club has facilitated over $4 billion in personal loans since launching in 2007. Earlier this year, the company added a small-business lending platform. Last month, Lending Club agreed to buy Springstone Financial for $140 million in cash and stock in a deal that is expected to significantly expand its lending services through K-12 education and elective medical procedures' financing.