An automated model for underwriting and pricing applicants for unsecured, closed-end loans has earned a “no-action letter” (NAL) for a California-based firm that provides an online lending platform, the Consumer Financial Protection Bureau (CFPB) said Monday.
In a release the agency said Upstart Network, Inc. was granted the NAL, which states that the bureau will not bring a supervisory or enforcement action against a company for providing a product or service under certain facts and circumstances.
Upstart, according to the bureau, intends to use artificial intelligence for pricing and underwriting loans. The NAL issued by the agency is dated Nov. 30.
Upstart had originally been granted an NAL in 2017, with the expiration of that letter (originally set for Sept. 11, 2020. That letter was with respect to the Equal Credit Opportunity Act (ECOA, Regulation B) as to Upstart’s automated underwriting model.
The agency extended that letter’s expiration to Dec. 1, and then issued a new letter dated Nov. 30.