Lending Club

The banking holding company's new type of private security, launched last year, also reached $3 billion in loans sold last month.

The digital lender, which bought Radius Bancorp in February, still expects to record a full-year loss partly because of merger-related costs. But its stock price soared Thursday after it reported second-quarter net income of $9.37 million.

The agreement will likely end a three-year-old dispute over allegations that the company misled borrowers by promising no hidden fees on its consumer loans.

The regulator's order moves the San Francisco-based company one step closer to becoming the first online lender to own a bank.

Fintech lenders that reported a surge in missed payments at the start of the pandemic have seen credit quality rebound substantially since. But credit performance could still deteriorate if high unemployment persists and Congress fails to enact more relief measures.

Other challenger banks focused on personal loans have struggled since the onset of the coronavirus pandemic.

The upstarts enjoyed rapid growth during the long economic expansion. Now they are on the ropes.

The online lender has deployed new software designed to spot security risks early, especially the kind of cloud-data issues that led to the Capital One-Amazon breach.

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The online lender, reeling from the economic fallout of the coronavirus pandemic, also said it is cutting senior executives' salaries by 25%.