California's Union Bank has become the latest commercial bank to join forces with an online peer-to-peer loan approval site by entering a strategic alliance with Lending Club.
Under the agreement, Union Bank will purchase personal loans through the Lending Club platform, and the two companies will work together to create new credit products to be made available to both companies' customer base.
"This relationship will allow Union Bank to invest in high quality assets while bringing new products to our customers," says Union Bank EVP James Francis, head of consumer lending. "Lending Club delivers an excellent customer experience and has established a reputation for innovation. We are excited to work with this innovative organization."
As of March 31, 2014, more than $4 billion in personal loans have been originated through the Lending Club platform. In the same month, the company launched a small business loan platform, and in April acquired Springstone Financial which offers consumer financing for education and healthcare.
Big banks and institutional investors have recently begun sniffing around P2P lenders, with City Group, Capital One, Bank of Montreal and Deutsche Bank all buying up loans originated through these platforms.
In March, Barclays Africa (formerly Absa) went one step further in acquring a 49% stake in South African peer-to-peer lending marketplace RainFin.