Upstart nabs conditional bank charter

Upstart, a major player in AI-driven lending, has received preliminary approval for a national bank charter. This is a significant shift for a company that has primarily acted as a technology middleman between consumers and partner banks. For retailers and merchants who use Upstart-powered financing products, this means greater stability and more consistent funding for customer loans. In the past, Upstart’s lending volume was highly sensitive to the whims of the capital markets. By becoming a bank, Upstart can hold deposits and fund loans directly from its own balance sheet. This move reduces the chance of abrupt 'lending freezes' during economic downturns. It also suggests that Upstart will have more control over its credit products, potentially leading to faster approvals and more competitive rates for your customers. The conditional charter requires Upstart to meet strict regulatory milestones before it fully opens its doors, but the trajectory is clear: one of the leading names in consumer credit is becoming a full-fledged financial institution. For operators, this validates AI-based underwriting as a permanent fixture in the national banking landscape rather than just a fintech experiment.

Source: Banking Dive

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