Lending Club can often be referred to as a peer to peer lender ; however this is n't how it acts . On the assets side, deposits at the Federal Reserve are reduced for Bank A and increased for Bank B. The majority of people tend to think that banks use deposits to fund loans , however Lending Club make a loan that bonds up with investors who have extra cash which they use to supply the credit . Therefore it is n't true that Lending Club will act by eliminating financial intermediates in the transactions between buyers and buyers .
Lending Club can often be referred to as a peer to peer lender ; however this is n't how it acts . The majority of people tend to think that banks use deposits to fund loans , however Lending Club make a loan that bonds up with investors who have extra cash which they use to supply the credit . Therefore it is n't true that Lending Club will act by eliminating financial intermediates in the transactions between buyers and buyers .