This is how to bring a year to a thundering close: On the last day of 2020, shares of fintech company LendingClub (LC -1.50%) shot 26% higher following some excellent news from a regulator announced earlier on Thursday.
The Office of the Comptroller of the Currency (OCC) has approved LendingClub's acquisition of Radius Bancorp, a Boston-based online bank operator, in a $185 million cash-and-stock deal originally announced in February 2020.
This isn't the final hurdle for LendingClub, as the deal must still be approved by the Federal Reserve. However, the OCC's nod is a critical step on the way to closing the acquisition.
Investors are clearly convinced that this will occur. When and if it does, LendingClub will launch a business called LendingClub Bank, featuring many of the characteristics and offerings of traditional lenders.
With the OCC's green light, "we have completed another important milestone in our journey to become the only full-spectrum fintech marketplace bank and the first neobank that will be publicly traded in the U.S.," the company wrote in a statement quoted by American Banker.
This is very welcome news for LendingClub shareholders. Investors were right to react to it the way they did. Owning a "proper" bank will open promising new revenue streams and give the company access to cheap capital in the form of deposits, among numerous other benefits.