Upstart Receives Conditional OCC Approval for Bank Charter

AI-lending giant Upstart has received conditional approval from the OCC to launch its own national bank. This is a major shift for a company that previously relied on third-party bank partners to fund loans. For retailers and service providers who use Upstart for consumer financing, this means more stability and potentially more aggressive lending. By becoming a bank, Upstart will have access to lower-cost funding through customer deposits rather than relying solely on fickle capital markets. This move suggests that Upstart is planning to broaden its reach across the credit spectrum. A national bank charter allows them to bypass certain state-by-state lending roadblocks, which could lead to more consistent loan approvals for your customers nationwide. It also signals that Upstart is doubling down on its 'AI-native' approach to credit, aiming to prove that its algorithms can manage risk better than traditional banks. While the approval is conditional, this puts Upstart on a path to becoming a vertically integrated powerhouse in the consumer finance space, potentially offering more competitive rates and diversified loan products for your checkout counter or sales floor.

Source: PYMNTS

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