Date: | 03/12/2018 |
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Organization: | Division of Banks |
Docket Number: | 2018-0001 |
Location: | San Francisco, CA and Westborough, MA |
WHEREAS, LENDINGCLUB CORPORATION, (“LendingClub”) formerly licensed as a small loan company under Massachusetts General Laws chapter 140 sections 96 to 114A, and its subsidiary SPRINGSTONE FINANCIAL, LLC, (“Springstone”) (collectively the “Corporation”) have been advised of their rights to Notice and Hearing pursuant to Massachusetts General Laws chapter 30A, section 10, and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER (Consent Agreement) with the Division of Banks (Division) dated March 12, 2018 whereby, solely for the purpose of settling this matter and without admitting any allegations of fact or the existence of any violations of law LendingClub and Springstone agree to the issuance of this CONSENT ORDER (Consent Order) by the Commissioner of Banks (Commissioner);
WHEREAS, the Division, through the Commissioner, has jurisdiction over the licensing and regulation of persons and entities directly or indirectly engaged in the business of making closed end small loans to consumers in Massachusetts (“small loans”) as such business is described in Massachusetts General Laws chapter 140, section 96 (“small loan companies”);
WHEREAS, a person or entity must register with the Commissioner prior to acting as a third party loan servicer in Massachusetts pursuant to Massachusetts General Laws chapter 93, section 24A;
WHEREAS, a person or entity making small loans must comply with the requirements of 209 CMR 26.00 et seq.;
WHEREAS, LendingClub has its main office located at 71 Stevenson St, Suite 300, San Francisco, California;
WHEREAS, Springstone has its main office located at 1700 West Park Drive, Suite 310 Westborough, MA 01581;
WHEREAS, LendingClub was initially licensed in the Commonwealth as a small loan company on or about April 17, 2007;
WHEREAS, on or about June 1, 2011 LendingClub entered into a Consent Order with the Division whereby the LendingClub agreed to surrender its license and:
cease engaging in the business of a small loan company in Massachusetts, as such business is described in General Laws chapter 140, section 96; including, but not limited to, making small loans as defined therein and/or directly or indirectly engaging, for a fee, commission, bonus or other consideration, in the business of negotiating, arranging, aiding or assisting the borrower or lender in procuring or making loans of six thousand dollars or less, for which the amount paid or to be paid for interest and expenses, exceeds an amount equivalent to twelve per cent per annum, whether such loans are actually made by LendingClub or by another party.
WHEREAS, LendingClub surrendered its small loan license on or about August 1, 2011.
WHEREAS, on or about August 31, 2011 LendingClub applied for a third party loan servicer registration with the Division;
WHEREAS, on or about May 2, 2013 LendingClub’s third party loan servicer registration application was deemed Withdrawn – Application Abandoned;
WHEREAS, on or about October 12, 2015 LendingClub applied for a debt collector license with the Division;
WHEREAS, on or about October 23, 2015 LendingClub applied for a small loan company license with the Division;
WHEREAS, currently the Corporation has no licenses or registrations with the Division.
WHEREAS, LendingClub has engaged in the business of a third party loan servicer from at least August 2011 through the present without a third party loan servicer registration;
WHEREAS, LendingClub engaged in the business of arranging small loans for a fee from August 1, 2011 through the present without a small loan company license;
WHEREAS, Springstone engaged in the business of arranging small loans for a fee from April 17, 2014 through the present without a small loan company license;
WHEREAS, the parties now seek to resolve by mutual agreement the matters identified above.