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Things are getting even worse for the once-poster child of online lending

May 18, 2016, 22:35 IST

Lending Club CEO Renaud LaplancheFlickr/ Leweb3

LendingClub, the peer-to-peer lender that was once the poster child of online lending, is in a tailspin.

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New York regulators have subpoenaed the fintech company over the interest rates and fees it charges customers, The Wall Street Journal's Peter Rudegeair reported.

The subpoena is not related to last week's departure of CEO Renaud Laplanche or the internal investigation that instigated his ousting, according to CNBC.

On Tuesday, LendingClub was subpoenaed by the Department of Justice and also contacted by the SEC.

Shares in LendingClub have dropped 78% over the past year.

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As Business Insider's Oscar Williams-Grut reported, the company is already facing two class-action lawsuits in the US, both filed since the start of the year.

One, filed in California, accuses the company of "making materially false and misleading statements in the registration statement and prospectus issued in connection with the IPO regarding, among other things, the company's business model, compliance with regulatory matters, and their impact on the company's business, operations, and future results."

Another, lodged in New York, claims people "received loans, through the company's platform, that exceeded states' usury limits in violation of state usury and consumer protection laws."

Wednesday's news follows a recent internal investigation that found an issue with $22.3 million worth of loans sold to a single investor, reported to be Jefferies, in March and April. Some of the loans didn't meet the buyer's criteria, but were doctored to look as if they did.

That led to Laplanche's departure.

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Goldman Sachs and Jefferies have both since stopped doing deals with the fintech company. Those banks had been buying Lending Club's loans and packaging and selling them as bonds to investors.

LendingClub has also canceled its summer internship program, CNBC.com's Ari Levy reported.

"We think it's the most prudent course of action for everyone involved," the company told CNBC.

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