Back on Friday, LendingClub (LC) increased rates specifically targeted at the riskest borrowers. The news apparently sacred the market and sent the stock down over 7% on Monday. The news is actually good for investors on the platform. The increased rates only amount to a weighted average of 26 bps and helps offset higher forecasted results. The key is that the projected investor returns are maintained based on these moves. The only real impact to investors in the stock is that LendingClub is reducing loan approvals to the high risk borrowers that are piling up credit. The impact is approximately 1% of previous borrowers so very immaterial. In reality, it isn't an issue because LendingClub faces a scenario of lack of investors and not lack of borrowers. The best outcome is to push investors into positive returns from borrowers with better credit. At $5, LendingClub is an incredible value and the news is not negative as presented by the trading action. Disclosure: Long LC