LendingClub-Radius Bank deal clears final regulatory hurdles

LendingClub has received the regulatory OKs it needs to buy Radius Bancorp less than a year after the deal was announced.

The San Francisco-based online lender said Tuesday that the Federal Reserve Board approved its purchase of Radius, a $2.4 billion-asset bank in Boston. The Office of the Comptroller of the Currency had approved the acquisition Dec. 30.

LendingClub expects the acquisition to close on or around Feb. 1. No shareholder approval is required.

The deal is the first instance of a U.S. online lender buying a bank. It could also open the door for more fintech-bank acquisitions.

The acquisition would give the online lender a national bank charter, a low-cost source of funding for its loans and a suite of deposit accounts that could attract LendingClub members who rely on credit cards to manage their cash flow.

LendingClub announced its agreement to buy Radius for $185 million in February 2020. The online lender launched in 2007 as an online provider of installment loans.

“As the full-spectrum fintech marketplace bank, LendingClub will be able to use our technology and data-driven platform to provide new products and services to our millions of members that will help them both pay less when borrowing and earn more when saving,” Scott Sanborn, LendingClub's CEO, said in a press release Tuesday.

In a blog post on the LendingClub website, Sanborn summarized the combined company’s initial plans. The first product will be a high-yield savings account for retail investors. The company is also eyeing new lending options for trade union partners and their members, a core client base for Radius. It will maintain its loan marketplace.

“This transaction brings together the two sides of a bank balance sheet at scale and two strong customer bases that present compelling opportunities for future growth,” Sanborn wrote in the blog post.