Status update on closing my accounts

This is an update on the process I am using to close my Lending Club IRA with Strata Trust as the custodian. I contacted Lending Club with my desire and they sent me a form via Email that was a combined Lending Club and Strata form. I detailed the requirements in my previous post. I completed the form and submitted it to Lending Club on Wednesday April 25^th. I received an Email from Lending Club within a couple of hours indicating that they were forwarding it to Strata and would let me know when it is completed.

I checked my accounts on Thursday morning and there weren’t any changes to either. I did have some reaming cash in Strata. Besides the 3 late notes, I also had $164.81 in cash at Lending Club. I assumed that this would have been moved. I initiated a withdrawal of the cash. A withdrawal from a Lending Club IRA goes to the custodian (Strata) and takes a day. The cash immediately disappears from the Lending Club account.

On Friday morning, the cash had not gotten to Strata, not unexpected. But there was an additional $12.25 cash in my Lending Club account. I withdrew it to my Strata account, leaving zero again in the Lending Club account.

On Saturday, the first withdrawal for $164.81 was in the Strata account. But again, there was more cash in Lending Club, $6.89. I initiated a withdrawal of this to Strata. I was curious about why I was getting money in the Lending Club account, so I checked the activity for the last few days. It turned out that these are recovery fees from charged off loans. There were over 50 of these recoveries in the last two days. I don’t know if this will continue, or how long it may last.

I’ll probably update the status of this process in the middle of next week. I’ll post on @billlanke on Twitter when I do.

Closng the Lending Club IRA account

I contacted Lending Club to see if there was an option to get rid of the last 3 very bad notes in my IRA account. Much to my surprise there was one, forfeit. They sent a form that is used to close the Lending Club account and send the remaining funds to Strata (the IRA custodian). Theoretically then Strata subtracts their account closing fees and send the remaining cash.

The form has the following sections.

1.       Account Information – Identifies owner and account information.

2.       Type of Distribution – Several checkbox alternatives. In my case, I indicated it was a normal distribution from a traditional simple IRA.

3.       Select your Account Closure and Distribution Options – This section presents the options available to deal with your remaining notes. There are two choices. You can close your account and transfer your notes a to taxable account. Or you can elect to forfeit the notes to Lending Club. This is the option I chose. You also specify what you want Strata to do with the resulting cash in your IRA account. I selected sending a check by U.S. Mail.

4.       Federal and State Tax Withholding Election and Information – I elected to have 10% withheld for federal taxes. You do have the option to waive withholding taxes.

5.       Lending Club Investor Account Closure Statement – A place to initial agreeing to the forfeiture of remaining notes and closing of the account.

6.       Signature – Section to sign and date the form.

7.       Spousal Consent – If Closing Lending Club Account – Apparently spousal consent is required if you live in a community property state. I checked the box saying I did not.

They did provide a list of the Strata fees.  I will incur a $50 fee for “Full Account Termination (Account Value <$10,000)”.

I submitted the completed form by Email today, April 25^th, 2018. I will followup with another post when I get more information on how the process is going. Follow me on Twitter @billlanke to know when I do this.

3 Notes to go

One of the 4 remaining very late notes was charged off last week. This leaves 3 to go. I am planning on contacting Lending Club’s customer service to see if there is another alternative to waiting until they are charged off to begin the account closing process. If not, it’ll probably be another six weeks before they are charged off. I suppose one could surprise and make a payment. In that case, I’ll be able to sell it on FOLIOfn.

Meanwhile, I am turning my attention to my other blog, ole44bill.blogspot.com. I’ve started doing cryptocurrency analysis to see if I can develop a reasonable trading strategy. Follow @ole44bill on Twitter for updates on blog posts.