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LendingClub CEO Sees Facebook Coin Drawing Government Scrutiny

LendingClub CEO Sees Facebook Coin Drawing Government Scrutiny

(Bloomberg) -- Facebook Inc.’s attempt at remaking money with Libra, a new cryptocurrency, is likely to invite intense official scrutiny, according to Scott Sanborn, chief executive of LendingClub Corp.

“I think the U.S. government is going to have a lot to say about a fiat currency in the hands of a private company,” Sanborn said in an interview.

LendingClub CEO Sees Facebook Coin Drawing Government Scrutiny

The Senate Banking Committee has set a July 16 hearing to discuss Libra, while House Financial Services Committee Chairwoman Maxine Waters and others are calling for action.

Sanborn is no stranger to regulatory hurdles: He’s been trying to rebuild LendingClub since taking over for founder and former CEO Renaud Laplanche in 2016, after a scandal at the consumer-loan marketplace sent shares plunging. The stock was trading around $2.84 Friday, or just over 1/10 of its highest closing price: $27.90, in December 2014.

Sanborn -- who’s also familiar with the difficulty of trying to establish a new business model in the fintech world -- said he “absolutely” loves the innovation involved with Libra, adding that it has the potential to go mainstream. With a stablecoin, a digital asset backed by securities to minimize price fluctuations, Sanborn sees “a theoretical possibility” of offering lending, which would be far harder with more volatile cryptocurrencies.

The CEO declined to detail how LendingClub might deal with Libra as the venture is so new, and said that he was unaware of any approach to his company about joining in the effort.

Earlier, Sanborn and other LendingClub staff rang the bell at the market opening of the New York Stock Exchange. The company has facilitated more than $50 billion in loans for over 3 million borrowers since its launch in 2007.

Read more: Banks Have Little to Fear From New Facebook Coin, Atlantic Says

--With assistance from Elizabeth Rembert.

To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Jeremy R. Cooke, Michael J. Moore

©2019 Bloomberg L.P.