Lending Tree Seeks to Build CU Alliances
The CEO of online loan brokerage Lending Tree told CU Times the site is open to working with credit unions as lenders if field of membership questions could be resolved.
“I like credit unions. I think the work they do is very important,” Lending Tree CEO Doug Lebda said. “I suspect it's the limitations on who they can serve that may have hampered many of them from becoming more involved with us.”
Lending Tree collects information from consumers seeking loans and then connects them with lenders willing to make the loans. The site offers a wide variety of loans, from housing loans to auto and personal loans, as well as credit card offers. The company receives a fee for every qualified application, Lebda explained.
“We would be happy to partner with credit unions,” he said.
Although Lebda did not mention it, at least one credit union has offered loans through Lending Tree in the past. In March, 2009, the then $419 million Sound Credit Union began offering home equity loans to consumers in the Tacoma, Wash., area. It was the first credit union to establish such a relationship.
The now $1.1 billion credit union only stayed on the program for about a year, according to Carl Roer, vice president of lending for the credit union then and now.
“I’m not saying there was anything negative about them or that we didn't like them,” Roer explained. “We just didn't see the lift in applications we had hoped to see” from the program.
Currently, Lending Tree said five other credit unions are also partners or are on their way to establishing alliances.
Lebda recounted how he started Lending Tree in 1998 when, as an accountant, he went through a very arduous and frustrating experience trying to finance his first home purchase. He concluded that consumers needed a simpler and more streamlined approach to applying for loans.
That approach and the explosion of the Internet helped Lending Tree grow to $135 million in annual revenue in 2013, according to the company's SEC filings. The firm has also seen its personal loan business grow by 150% since July of 2013.
Lebda described Lending Tree's overall approach as one centered on the consumer, laying out an eventual goal of becoming a virtual marketplace for loans and finance products that consumers will be able to access from anywhere and on a variety of different platforms.
Federal regulations already cover some of the site's business and the firm has a compliance department, even though the balance of the regulatory burden rests with the ultimate lender, Lebda explained.
“We support common-sense lending regulations,” he said, pointing out that as a consumer facing lending site, Lending Tree opposes any lending practices that hurt consumers or obscures the costs and terms of loans.