Securities lending is generally low-risk, but there are a few things to be aware of:
Counterparty risk
If a borrower defaults, Betterment Securities’ clearing firm Apex must return your shares using the pledged collateral. In that rare event, you have rights to access that collateral. It's held in a secure custody account and administered by a trustee. More detail is available in Betterment Securities disclosures and Apex's terms.
Variable income
Lending income depends on market demand and may fluctuate from month to month. There's no guarantee your shares will be loaned or that you'll earn income every month.
Tax impact on substitute payments
While your shares are on loan, any dividends are replaced by cash substitute payments. These are taxed as ordinary income rather than at the preferential dividend rate—which may be higher depending on your tax situation. Betterment's system is designed to loan your shares only when it estimates your earnings will exceed the tax impact, but Betterment cannot guarantee that earnings will always offset the tax difference. You may want to consult a tax advisor, as Betterment is not a tax advisor and cannot provide tax advice.