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Investor Updates

LendingClub IRA FAQs

Last update: December 20, 2020

 

What’s happening?

Effective December 31, 2020, LendingClub will retire the Notes platform. This will not affect the existing Notes you own but means that the last day to purchase Notes for your LendingClub IRA will be December 27. 

 

Since the Notes platform is retiring, what can I invest in for my LendingClub IRA?

At this time, there are no investment options that will be provided by LendingClub after the Notes platform is retired. However, we are working to provide our IRA investors with options and look forward to sharing updates in January 2021. In the meantime, thank you for your patience. 

 

Will LendingClub continue to waive my annual account fee?

At this time, LendingClub will continue to waive the annual account fee, if you the minimum investment requirement. 

 

How do I transfer the cash in my LendingClub IRA to a new (or existing) IRA with another IRA custodian (e.g. Fidelity, Vanguard, etc.)?

If you choose to transfer your cash to another IRA custodian, you will need to take the following actions:

  • Log into your LendingClub IRA and go to the Transfer page. Submit the appropriate form to transfer the cash in your LendingClub IRA to your current IRA custodian [e.g. STRATA, ForgeTrust (formerly ISTC) or CamaPlan].
  • Once the transfer is complete (about 2 business days), please contact your new IRA custodian to initiate a transfer request from current IRA custodian to your new IRA custodian.
  • Please keep in mind that you will only be able to transfer the cash from your LendingClub IRA, as your Notes are not transferrable. This means you would continue to have your LendingClub IRA open with your current IRA custodian until your Notes fully mature. 

 

Why can’t I transfer the Notes in my LendingClub IRA to another IRA custodian?

  • While you have the option to transfer the available cash in your LendingClub IRA to another IRA custodian, the Notes you hold are not transferrable.
  • LendingClub has agreements with your current IRA custodian which allows for reporting and management of your LendingClub IRA.
  • If LendingClub does not have agreements in place with the new IRA custodian you choose, then it cannot fulfill its duty to report and manage your LendingClub IRA, which is why Notes are not transferrable.

 

How do I sell the Notes in my LendingClub IRA?

The secondary market for the buying and selling of Notes was discontinued on August 28, 2020. At this time, there are no other options to sell the Notes you hold in your LendingClub IRA, so investors should be prepared to hold their Notes until they fully mature. 

 

How do I close my LendingClub IRA?

  • If you only have cash in your LendingClub IRA, please submit the Account Closure Form to your current IRA custodian:
  • You will need to provide directions on where to transfer the cash in your account. If you do not transfer the cash to another IRA and elect a distribution, this may be subject to taxes and IRA penalties. Please consult with your tax advisor before taking this action.
  • If you have both cash and Notes in your LendingClub IRA, you will not be able to close your account, unless you elect to also forfeit the Notes you hold. This means you forfeit:
    • Ownership of the Notes held in your LendingClub IRA back to LendingClub. In other words, you get $0 back for any Notes you hold.
    • Any payments of principal and interest related to the Notes you hold, including any Notes in “charge-off” status.
  • If you choose this option, there is no additional action needed as the acknowledgement of Notes forfeiture is already referenced in the Account Closure Form above.

 

Can I move the cash in my LendingClub IRA to the Founder Savings account?

  • While you are eligible to open a Founder Savings account since you are a Notes investor, you will not be able to transfer the cash from your LendingClub IRA directly to your Founder Savings account.
  • When you open a Founder Savings account, this will be a separate bank account that won’t be linked to your LendingClub IRA.
  • If you choose to transfer the cash from your LendingClub IRA to your Founder Savings account (or any other bank account you have on file), this may be considered as a distribution and subject to potential IRA penalties.
  • Please consult with your tax adviser or visit the IRS's FAQ section on IRAs for more information.

 

If we can help provide answers to additional questions, please email us at investing@lendingclub.com.

 

 

 

 

 

 

 

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