The Week in Business: Silicon Valley vs. Regulation, Fed Politics, and More

Lending Club saw its stock price demolished this week, after its C.E.O. resigned amid revelations that it had been forced to buy back twenty-two million dollars in loans from an investor. The company—which serves as a middleman between borrowers and lenders—repurchased the loans because they had failed to “conform to the investor’s express instructions.” Compounding the furor, the company backdated loan applications to make them look as though they conformed to those instructions. Twenty-two million dollars isn’t that much money, given that Lending Club facilitated $2.6 billion in loans in its most recent quarter, but the buyback played into investors’ broader concerns about the industry, and in particular about whether online lenders have set up rigorous-enough oversight mechanisms.

See the rest of the story at newyorker.com

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