[Chambo]

Lending Club is already regulated by the SEC. Each loan is booked as a security and each security is issued with a prospectus about the deal. Each prospectus tells you about credit score, liens, income, and other stuff. It's the same thing as buying stock.

There are defaults but their loans are classified on a scale of A to G (G having the highest rate of return, highest risk, and highest default rate). Even class As have defaults, just fewer.

A to G rating worked out SO WELL for Standard & Poors and Lehman Brothers too....