LendingClub’s Scott Sanborn Saw ‘Happen Bank’ Coming a Decade Ago

Scott Sanborn has been telling people LendingClub needed a different name for 10 years. The first audience was the board that ended up hiring him as CEO.

“True story: literally in the interview process,” Sanborn told PYMNTS’ Karen Webster, “I said, ‘The name is very limiting and it is very transactional.’”

One might have filed the comment away as inside baseball. The company had bigger things to prove than the elasticity of its brand. But the observation didn’t go away. It  just had to wait for the rest of the business to catch up to it.

This summer, when LendingClub officially becomes Happen Bank, it finally will.

A Business That Outgrew Its Name

Anyone who has followed LendingClub since the early days remembers the original pitch. Cut out the bank, let individual investors fund the loans, route everything through a marketplace. It was elegant on a slide. In practice, it had a ceiling.

“That initial model saying, ‘Hey, let’s have individuals fund the loans,’ it isn’t that that model didn’t work,” Sanborn said. “It’s that it was not very scalable.”

The constraints were structural. Operating as a registered marketplace meant every routine business decision became a public event.

“We were required to make a public filing anytime we changed the price, anytime we changed the credit policy,” he said.

Imagine running a consumer lender where every tweak to the risk model gets posted for your competitors to read. That was LendingClub’s daily reality. Each adjustment took longer than it should have and gave away more than it should have.

The 2021 acquisition of digital bank Radius let LendingClub start solving for both problems at once. Deposits came in. A mobile interface tied lending and saving together. The company began operating as a bank in everything but signage.

“We needed a name that evidenced that we’re more than lending,” Sanborn said.

The mismatch had become a real-world headache. Customers didn’t always realize they were dealing with a bank. Some, Sanborn noted with a wry edge, kept confusing them with LendingTree.

Why ‘Happen’ — and Why Now

The rebrand goes live this summer, and the thinking behind it is less about a fresh coat of paint than about how the products fit together. The whole point of buying Radius and building out the deposit side was to stop treating each customer interaction as a one-off transaction.

“Ours do actually work together,” he said.

The conversation came on the heels of the company’s Q1 earnings, released the same day as the interview, Monday, April 27. The numbers tell the story Sanborn has been building toward. More more than 5 million members, north of $100 billion in lifetime originations, and a deposit base that keeps growing alongside engagement metrics that suggest customers are actually using the platform, not just opening it.

When Bank Charters Multiply Like Rabbits

There was a time when a FinTech going after a bank charter was a man-bites-dog story. That moment has clearly passed.

“There’s been more applications for bank charter in the first quarter of this year than in the last several years combined,” Sanborn said.

Sort of like rabbits in the spring, Webster remarked. The FinTech world is recalibrating. Access to deposits and clean regulatory standing have become table stakes for any company that wants to scale, and a lot of operators have apparently decided to stop pretending otherwise.

The ‘Motivated Middle’

For all that has changed, what Sanborn says about the opportunity in retail banking has stayed remarkably consistent. Data is still underused. Customer experiences are still uneven. Products are still designed around the bank’s org chart rather than around how people actually run their financial lives. LendingClub’s answer is to narrow the aperture, hard.

“The really big unlock for us is we focus on a very, very specific customer,” he told Webster.

Sanborn calls them the “motivated middle” — high income, high FICO, but still active users of credit and financial tools. They’re not the underserved bottom of the market and they’re not private banking clients. They’re people managing real cash flows, paying down debt, and the part Sanborn likes to highlight, building up an average of $19,000 in savings on the platform after working through their borrowing.

Sanborn said that customers participating in LevelUp Savings generate 20% to 30% more monthly logins than their legacy savings product. And 6 in 10 new LevelUp Checking accounts come from personal loan borrowers, and 84% of those borrowers said they are now more likely to consider a LendingClub loan in the future. Borrowers who have paid off their loans are accumulating average balances of over $19,000.

That last data point is important, Sanborn emphasized. It suggests former borrowers are using LendingClub as a primary savings vehicle.

The strategy of bringing lending and deposits together is built for that customer. More than half of new loan originations now come from existing customers. That creates the flywheel that keeps the customer engaged, sticky and growing with the business.

Same Kernel, Bigger Surface Area

Webster asked Sanborn whether the rebrand felt like a departure from the original LendingClub mission of rewiring retail banking. He pushed back on the framing.

“The kernel of what we set out to do is still there,” he said. “It now spans everything we touch.”

In other words: same idea, more of it. Ten years on, the name is the last thing to change.