Despite inherent risks, community banks are continuing to enter into partnership agreements with Lending Club as they battle to remain relevant in the consumer lending business.
BankNewport is one of more than 200 community banks that have signed on to a deal with Lending Club on pitching consumer loans. The broader partnership was put together and overseen by BancAlliance, an industry cooperative group based in Maryland that develops products for the small banks by banding together and giving them a scale they wouldn’t have alone. Whatever hesitation the banks may have about sharing customers, BankNewport feels it has little choice. “We have to make sure we remain relevant,” Sandra Pattie, BankNewport’s CEO, said in an interview at a cafe overlooking the sailboat-dotted Newport harbor. “We’ve been trying for years, six years or so, to get away from our strong reliance on the residential mortgage market. This seemed like it does that for us.”