Lending Club banners hang on the facade of the New York Stock Exchange for it’s IPO on December 11, 2014 in New York.
Don Emmert | AFP | Getty Images
LendingClub, a fintech company that pioneered personal loans made online, is buying a U.S. bank to give it access to a stable and cheaper source of funding, CNBC has learned.
LendingClub is paying $185 million in cash and stock for Radius Bancorp, according to documents viewed by CNBC. Radius, a Boston-based online bank with about $1.4 billion in assets, is among a cohort of small lenders that have partnered with fintech firms who need the services of an FDIC regulated institution.
The move marks the first time a U.S. fintech company has acquired a bank. Fintech firms from Robinhood to Square have applied for ways to become banks as doing so would give them better profit margins and the ability to issue new products like checking accounts. Last week, mobile bank Varo Money got FDIC approval for a national bank charter, which would allow it to accept consumer deposits.
LendingClub, which is still the biggest U.S. provider of personal loans, had been a leader in an earlier wave of fintech firms focused on marketplace lending, or matching borrowers with lenders. The company had the biggest U.S. tech IPO of 2014, soaring to an $8.5 billion valuation. But it was dealt a blow in 2016 when founder Renaud Laplanche was ousted amid irregularities with loan practices, and its shares have never recovered.
Now, the fintech disruptor is poised…
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