RSSThe Consumer Financial Protection Bureau issued an order removing the AI lending platform Upstart Network from its list of approved no-action letters.
The CFPB initially granted Upstart its first no-action letter in September 2017 and a second in November 2020. The terms of the 2020 letter required Upstart to inform the regulatory agency of significant changes to its AI model before it is implemented. In mid-April, Upstart notified the CFPB that it wanted to add new variables to its underwriting and pricing model.
“The CFPB needed sufficient time to review and rigorously evaluate the implications of the changes to Upstart’s model,” the regulatory agency stated. “In response, Upstart requested termination of the no-action letter, effectively ending the company’s special regulatory status, and allowing it to be able to make changes to its model without need for CFPB review and approval.”
Upstart Network originates credit, including auto and personal loans, by providing bank partners with a proprietary, cloud-based lending platform that is marketed as AI. Last year, Upstart’s bank partners originated 1.3 millions, totaling $11.8 billion.
