It's a common mistake to refer to "the banks" as if they are all the same when they are not. The bank in question is a community bank with a conservative loan p

It's a common mistake to refer to "the banks" as if they are all the same when they are not. The bank in question is a community bank with a conservative loan portfolio. It did not experience the same losses banks with more aggressive portfolios did. As for the data you reference, in all of 2007, Lending Club did about $6 million in loans[1]. For comparison, it did over a billion dollars in loans in Q3 2014. Again, alternative online lenders have built the vast majority of their portfolios (or originated most of their loans in the case of services like Lending Club) during an unprecedented period of extraordinarily low interest rates and historically low defaults. I'm not suggesting that all of these loans are going to go bad when the economy turns; I was simply pointing out that exercises like the one linked to here are quite limited in their real-world utility. [1] https://www.lendingclub.com/info/statistics.action https://www.lendingclub.com/info/statistics.action