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ARTICLE · 19 SEPTEMBER 2017

CFPB Issues No-Action Letter To Alternative Credit Lending Platform

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The Consumer Financial Protection Bureau ("CFPB") has issued its first No-Action Letter ("No-Action Letter" or "Letter") in response to a request from Upstart Network, Inc. ("Upstart").

United StatesConsumer Protection
Melanie Brody
Melanie Brody
Ori Lev
Ori Lev
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The Consumer Financial Protection Bureau ("CFPB") has issued its first No-Action Letter ("No-Action Letter" or "Letter") in response to a request from Upstart Network, Inc. ("Upstart"). The No-Action Letter means that CFPB staff currently has no intention of recommending enforcement or supervisory action against Upstart. This decision is limited to the application of the Equal Credit Opportunity Act ("ECOA") and its implementing regulation, Regulation B, to Upstart's automated model for underwriting applicants for unsecured, non-revolving credit ("automated model").

Upstart is an online lending platform that, working with a bank partner, uses alternative data to facilitate credit and pricing decisions for consumers with limited credit or work history. In addition to relying on traditional credit information, Upstart uses non-traditional sources of information to evaluate a consumer's creditworthiness. For instance, Upstart might look at an applicant's educational

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