Wells Fargo has been an active player in the Crowdfunding space, serving as the indenture Trustee for both Lending Club and Prosper and owning a chunk of Lending Club through its venture capital arm, Norwest Venture Partners X. Recently, however, Wells Fargo decided it is no longer comfortable with the “risk profile” of retail Crowdfunding. Wells Fargo has been replaced by CSC Trust Company of Delaware as indenture Trustee for both P2P lenders.
To me it’s an interesting move, coming just as institutional investors begin pouring into the space.
Its possible Wells Fargo views the P2P lenders as competitors and isn’t interested in helping cannibalize its own consumer lending business, but that horse is out of the barn. Or maybe, with all its experience in the space, Wells Fargo is planning a more significant move.
I’ve contacted a few large institutional trustees recently and haven’t found a huge appetite for exposure to the Crowdfunding space, so I’m happy to see CSC step up to the plate.
Questions? Contact Mark Roderick at Flaster/Greenberg PC.