The following info is from the Nov. 12, 2025 "Weekly Brief" published by
The Independent Vanguard Adviser.If you participate in Vanguard's
Fully Paid Lending Program, what has been your experience with this program?
"In 2023, Vanguard opened the door to individual investors through its Fully Paid Lending (FPL) program,
which the email is promoting. Here’s how it works: If you own individual stocks and enroll, Vanguard may lend some of them. You’ll earn a bit of income—split 50/50 with Vanguard—and when the loan ends, your shares
are returned. You’ll keep 'economic ownership,' meaning you can sell the stock at any time."
"So again, what’s not to like?
First, while your shares are on loan, you lose your voting rights. The shares also aren’t protected by SIPC
during that period. If the stock pays a dividend, you’ll still receive it—but the payment may be taxed differently.
Finally, there’s no guaranteed payout. The income is variable and unpredictable."
"Those are manageable trade-offs. The big question is: What’s the risk?
Securities lending involves multiple moving parts—the lender (you), the borrower, a lending agent
sitting between the two, collateral management and more. The main risk is that the borrower defaults,
and the collateral isn’t enough to make you whole."
"That’s unlikely, but not impossible. Vanguard has extensive experience lending securities,
and the industry has tightened oversight over the years. Still, as with most 'extra income' offers,
there’s no free lunch."
https://www.independentvanguardadviser.com/weekly-brief-dont-mistake-noise-for-trouble/https://investor.vanguard.com/wealth-management/fully-paid-lending 
Comments
being my first year of this, what are the tax complications? definitely not worth it if any.
https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/value-securities-lending-three-charts.html
Vanguard's lending policy for its funds is to lend those securities can charge the highest rates (see second graph) - maximizing reward/risk. Something to keep in mind when lending your own securities.
Securities lending involves multiple moving parts—the lender (you), the borrower, a lending agent sitting between the two, collateral management and more. The main risk is that the borrower defaults, and the collateral isn’t enough to make you whole."
More or less. Here's a more complete description about how Apex Clearing (the clearing house that Public Investing, a trading platform, uses) manages its fully paid lending program. https://help.public.com/en/articles/7959466-what-is-fully-paid-securities-lending
So in the very unlikely event that Vanguard Brokerage defaults, the collateral will be sufficient to cover the value of the loaned security up to the day of default. What is at risk is just any appreciation of the security post default.
Perhaps more important is the split of income. IVA says that with Vanguard it is 50/50. According to Barron's (April 24, 2025), Fidelity is 60/40, Interactive Brokers and Schwab are 50/50, and Robinhood is 15/85.
https://www.barrons.com/articles/easy-income-securities-lending-3472fac5
If you lend out securities, you receive "cash in lieu" of dividends. Since you're not actually receiving dividends, that income doesn't meet the "qualified dividend" requirement for special tax treatment. Barron's goes on to say that investors typically close out the loan before the record date so that they receive "true" tax-favored divs.
The Barron's article was informative.
Thank you very much.