LendingClub services borrower loans and collects principal and interest payments from borrowers. Generally, collected payments are distributed (net of the 1% service fee) to investors who hold Notes corresponding to the loans.

Effective February 12, 2019, when borrowers make payments, LendingClub applies the applicable portion to investor accounts within one business day, versus the former transfer time of up to 5 business days.

By reducing the payment transfer period, investors:

• Receive their payments quicker.
• May see “reverse payment” transactions, reflecting failed payments from borrowers.
  • Under limited circumstances, prior to February 12, 2019, LendingClub had covered the cost of payments that failed after the payment transfer period of up to 5 days. LendingClub is no longer covering such payments.
  • Therefore, in rare cases, you may see a payment deposited and later reversed. Payments that fail after they’re deposited into investor accounts will appear as negative line items on investor statements.
• May experience negative ending cash balances in certain circumstances, which will be reflected on their statements.
  • Consider this example: If there is a low cash balance in an investor account, and a payment from a borrower is reversed, the investor cash balance could go negative up to the amount of the failed payment, less the investor’s available cash balance. The account’s available cash balance would remain negative until a new borrower payment is applied to the account or the investor deposits additional funds.