Last week I mentioned
a CBS MoneyWatch article highlighting the default risks of Lending Club investments.
There’s also another risk: too many investors. Lending Club is reporting that investment demand is starting to outpace loan demand. So it’s getting harder for Lending Club customers to invest.
A few excerpts from the Lending Club blog:
The decrease in visible loans is due to recent record inflow of investors and capital over the past two months (we signed up 2-3 times more new investors last month than average).
This sounds familiar with what many banks and credit unions are reporting: more deposits than loans. (Hat tip to the reader who emailed me news of this).