To turn off share lending on E*TRADE, you need to unenroll from the Fully Paid Lending Program by contacting customer service, since the option isn’t available for self-service in the online interface for all users. The program lends out your fully paid securities to generate potential income, but you can stop it by requesting removal from the program directly.
What is the Fully Paid Lending Program on E*TRADE?
The Fully Paid Lending Program is E*TRADE’s official name for share lending. It allows the brokerage to borrow your fully paid-for securities, positions not purchased on margin, and lend them to other parties, typically for short selling. In exchange, you may earn interest on the loaned shares. However, some investors prefer to turn off share lending on E*TRADE because loaned securities are removed from your account, you lose voting rights on those shares, and the program can put downward pressure on the stock price if the borrowed shares are used to facilitate short selling.
Before you begin: Check if your shares are on loan
Before you decide to unenroll, you should verify whether any of your positions are currently on loan. You can identify loaned positions by looking for the “FP” notation on the “Portfolios” page under the “Accounts” tab on etrade.com. Additionally, you can view the daily interest accrued from loaned positions by accessing the “Reports” tab under “Transactions” and selecting the “Fully Paid Lending Program accrual detail” link. This lets you see exactly which shares are loaned and what income they’re generating, so you can weigh whether stopping the program is worth it.
How to unenroll from the Fully Paid Lending Program
To unenroll, you must contact E*TRADE customer service directly. There is no self-service toggle in the account settings to disable the program for all users. Call or message the support team and request removal from the Fully Paid Lending Program. Once you unenroll, E*TRADE’s official documentation confirms that all outstanding loans are terminated. This is the most reliable way to turn off share lending on E*TRADE, and it ensures that no new loans are initiated on your eligible positions going forward.
Alternative ways to stop share lending on specific positions
If you don’t want to unenroll entirely but need to stop lending on particular shares, there are two automatic triggers. Selling a position that is currently on loan effectively terminates that specific loan, because the shares are no longer in your account. Similarly, writing a covered call on an underlying position that is on loan will also terminate the loan for those shares, as the option contract obligates you to hold the stock. These actions give you targeted control without ending the program for your entire account.
Key things to know before you turn off share lending
Before you make the call, understand the eligibility requirements and consequences. The Fully Paid Lending Program is available for IRA, cash, or margin accounts with a minimum of $200,000 in either liquid net worth or assets under management across all accounts tied to the same user ID. Standard margin accounts are eligible only when they have no margin balance (or a settled debit balance below $1,000) and no short equity positions. If an enrolled margin account’s settled debit balance rises above $1,000, the program will place new loans on hold automatically. Portfolio Margin accounts, Line of Credit accounts, and accounts with a non-domestic address are not eligible at all.
When your securities are on loan, they are removed from your account and may not be protected by the Securities Investor Protection Act of 1970 (SIPA). However, E*TRADE (Morgan Stanley Smith Barney LLC) provides cash collateral at least equal to 102% of the market value of the loaned securities, held in a deposit account for your benefit. This collateral reduces the risk, but you still do not retain the right to vote the securities that have been borrowed. If you plan to transfer stock that is currently on loan, either internally or externally, contact customer service first, they can help you manage the transfer without triggering unintended loan issues. Once you unenroll, all loans are terminated, so you regain full control over your shares and their associated rights.
