Podcast Summary:
Bloomberg Talks — LendingClub CEO Scott Sanborn Talks Credit & Holiday Spending
Date: December 3, 2025
Episode Overview
This episode features an in-depth conversation between Bloomberg hosts and Scott Sanborn, CEO of LendingClub, with critical analysis from Herman Chan, Bloomberg Intelligence senior analyst for U.S. regional banks. The discussion centers on LendingClub’s recent performance, credit market dynamics, the profile of today’s American credit user, and the company’s product innovation in lending—especially around debt consolidation and home improvement use cases. The episode aims to uncover how LendingClub navigates economic shifts and maintains credit quality, while exploring broader trends in consumer credit behavior during the holiday season.
Key Discussion Points & Insights
1. LendingClub’s Customer Base and Business Scope
[01:43–02:45]
- Target Market: The “middle majority” Americans—consumers with higher incomes ($80,000–$200,000, average ~$125,000) who are heavy users of credit, not the wealthiest, nor underserved populations.
- Scott Sanborn: “It represents about a third of the US population, but it’s close to half of the credit wallet.” [01:55]
- Credit Use Dynamics: These customers can afford major life expenses but require credit to manage them (cars, college, etc.), and often juggle multiple forms of debt, mostly excluding mortgages.
2. Marketplace Model and Credit Performance
[03:08–04:27]
- Marketplace Evolution: LendingClub began as a pure marketplace, selling all originated loans, then evolved post-bank acquisition (2021) to retain loans on their balance sheet—enabling more control, innovation, and resilience.
- Scott Sanborn: “We’re the largest eater of our own cooking. We’re the largest holder of LendingClub loans.” [03:30]
- Testing & Innovation: Retaining loans lets LendingClub pilot new products or risk models internally before offering them to marketplace buyers, leading to “lower delinquencies... lower roll rates, higher recovery rates, lower prepayments, lower fraud... literally every aspect... we’re outperforming.” [04:07]
- Credit Consistency: Results have “remained consistent” due to proactive adjustments, including “more than 200 tests in the market” at any time for pricing and underwriting refinements. [04:39]
3. Selective Lending and Debt Consolidation Strategy
[05:13–07:02]
- Stringent Selection: LendingClub is “very picky” about borrowers. The platform is designed to identify and nurture desirable customers, especially those seeking to refinance high-interest credit card debt.
- Scott Sanborn: “Our largest use cases [are] for people who already have... credit card debt... we say, great, you should do this instead.” [06:11]
- Debt Payoff Assurance: LendingClub directly pays off customers’ credit cards, ensuring loan proceeds go to debt reduction, not discretionary spending.
- User Benefit: This process typically saves borrowers significant interest (up to 700 basis points) and boosts their FICO scores by 30–35 points. [06:35]
4. Why Are Credit Card Rates So High?
[07:05–08:32]
- Consumer Behavior: Most credit card holders choose cards for rewards, not rates—many “don’t even know what the interest rate is.” Half don't carry balances (they pay off monthly, collecting rewards); the rest bear the burden of high interest.
- Scott Sanborn: “The research we’ve done is half of all customers say they don’t know the interest rate on their credit cards. And the half that say they do, more than half of them are wrong.” [08:14]
- Regulation Impact: The CARD Act limited arbitrary rate hikes, leading issuers to set higher baseline rates. Those carrying a balance effectively subsidize rewards for transactors.
5. Scaling Up: New Product Lines and Market Expansion
[09:00–11:32]
- Growth Ambitions: LendingClub aims to double originations to $18–20 billion/year. The main lever remains refinancing credit card debt—a $1.3 trillion market—with additional growth from major purchase financings (medical, education, home improvement).
- Home Improvement Lending: The company’s next adjacency is unsecured home improvement loans, leveraging their acquisition-driven capability to disperse funds in tranches directly to suppliers/contractors.
- Scott Sanborn: “People... are staying in their homes longer... The homes need to be invested in, they need to be improved.” [11:04]
6. State of the Consumer
[11:32–12:01]
- Resilience: The typical LendingClub borrower remains “remarkably resilient” despite broader economic uncertainty, though “the sentiment isn’t great.” [11:35, 11:47]
- Host Take: The hosts recognize LendingClub’s “great vantage and view into what’s going on in the economy.” [11:51]
Notable Quotes & Memorable Moments
-
“We’re the largest eater of our own cooking.”
– Scott Sanborn, on retaining and testing loans internally [03:30] -
“Our largest use cases for people who already have debt, credit card debt most notably, which at this point, more than half of all Americans are carrying... 23% interest rate. It’s high. Highest they’ve ever been in history.”
– Scott Sanborn [06:01] -
“The research we’ve done is half of all customers say they don’t know the interest rate on their credit cards. And the half that say they do, more than half of them are wrong.”
– Scott Sanborn [08:14] -
“Consumer we serve is demonstrating themselves to be remarkably resilient despite... the sentiment isn’t great.”
– Scott Sanborn [11:35, 11:47]
Timestamps for Key Segments
- Introduction & Company Overview: 00:29–02:45
- Marketplace Model & Credit Outperformance: 03:08–04:27
- Real-Time Credit Data & Active Testing: 04:27–05:17
- Selecting Borrowers & Debt Consolidation: 05:13–07:02
- Why Credit Card Rates Are High: 07:05–08:32
- Growth Targets & Product Expansion: 09:00–11:32
- The State of the Consumer: 11:32–12:01
Summary Flow & Context
The episode delivers a pragmatic, data-driven, and at times conversational look at the evolution of credit, how LendingClub’s unique approach delivers value (for both the business and its customers), and the company’s roadmap for growth. CEO Scott Sanborn candidly addresses the credit ecosystem’s challenges (especially for borrowers), demystifies credit card interest rates, and explains LendingClub’s dual track of vigilance and innovation. The tenor throughout is both analytical and accessible—grounded in real consumer habits and marketplace realities.