I used to work for a fintech like LendingClub. First you absolutely need a license. You can’t just go making consumer loans without the proper license to do so

I used to work for a fintech like LendingClub. First you absolutely need a license. You can’t just go making consumer loans without the proper license to do so. If that wasn’t the case there would be rampant abuse / predatory schemes as there was before. The problem is not getting a license so to speak, the problem is that it’s not worth it. Not only do you need to get 50 of them and follow a cluster-fuck of 50 different state laws, you need to follow the ongoing compliance procedures of all 50 state to maintain said licenses. Why would any sane company do that if there is a bank that has already done that, and willing to lend in your name, if they get a little piece of the action? Your whole value prop is in marketing and underwriting, not legal compliance. So outsource that shit and focus your resources on what is going to differentiate you. So what you see is that lendingclub tried to get their own licenses, realized it was fucking stupid for above reasons, and then outsourced it. They still have the licenses to either keep servicing some existing loans or perhaps for some other business reason (eg perhaps a particular kind of product is actually easier to license themselves than thru third party for a particular state), but that’s definitely less common than outsourcing.