Lending Club And The CFPB Agree On $700K In Restitution For Springstone Customers

Lending Club

, the world's largest online marketplace connecting borrowers and investors, announced today that Springstone Financial, LLC (Springstone), a subsidiary of Lending Club, agreed to settle with the Consumer Financial Protection Bureau (CFPB) related to the staff's concerns on possible borrower confusion about the terms of a deferred interest product, which was terminated by Lending Club shortly after its acquisition of Springstone in April 2014. Lending Club, the world's largest online marketplace connecting borrowers and investors. To resolve this matter, Springstone agreed to pay restitution of $700,000 to certain borrowers in its finance program from 2009 to 2014. The settlement amount is fully covered by the indemnification provisions of the Springstone purchase agreement and therefor will not result in any adverse financial charge to Lending Club. Lending Club previously disclosed in its filings with the U.S. Securities and Exchange Commission that it was engaged in discussions with the CFPB in connection with Springstone's previous financing products. The settlement does not involve any penalties or fine or admission of wrongdoing on the part of Springstone or Lending Club or their employees, directors, officers or agents. Renaud Laplanche, founder and CEO of Lending Club, said, "The product in question, which is popular in many finance programs, provided for the potential of interest being charged retroactively to the customer and as such was not up to Lending Club's standards of transparency, consumer friendliness and responsible lending. We terminated this product shortly after the acquisition of Springstone and replaced it with a more transparent and responsible, true no-interest product. We appreciate the CFPB's assistance in arriving at a fair outcome for Springstone customers while raising the bar on consumer protection."