John Mack has added another position to his already robust vitae: This morning came news that the former Morgan Stanley CEO has joined the board of San Francisco–based Lending Club, a peer-to-peer lending outfit in which outside investors provide loans of up to $35,000 to consumers, and collect on their interest payments.
Just like a bank, except not.
“We are a lower-cost, more efficient alternative to the banks,” says Lending Club’s very French* CEO, Renaud Laplanche, pointing out that in the past few years, big banks have had to raise interest rates on consumer credit cards and lower payments to investors in order to comply with regulations and finance their big, lumbering operations. “The banking sector is one of the last big industries that is still very bureaucratic,” he adds. With the addition of John Mack to what Laplanche calls an “all star” group of investors that includes “government officials, hedge-fund managers, a lot of pretty well-known people interested in lots of lending and consumer credit,” Lending Club offers a unique and bold solution: Why not just cut out the middleman and make your credit-card payments directly to people who caused and exacerbated the financial crisis?
Laplanche is not bothered by Mack’s arguably disastrous tenure at Morgan Stanley: “All the investment banks were in the same boat. I think where he stands out is in the way that he managed to maintain Morgan Stanley’s independence, at a time when Merrill Lynch was being sold to Bank of America, and he got that investment from Mitsubishi … ” Yeah, yeah, we know. So would he take a meeting with Lloyd Blankfein, if the Goldman Sachs CEO became available? Long pause. “I er, I’m not as familiar with … (laughter) I can’t really comment.”
*An earlier version this post misidentified Laplanche as French-Canadian.