The CFPB recently issued a new no-action letter (NAL) to Upstart Network, Inc. regarding its automated model for making underwriting and pricing decisions on applications by consumers for unsecured, closed-end loans.  Upstart uses artificial intelligence techniques and alternative data in its model.

The new NAL is essentially a renewal of the NAL issued to Upstart

A new CFPB blog post titled “An update on credit access and the Bureau’s first No-Action Letter” provides a boost to lenders using alternative data and machine learning in their underwriting models.

The Bureau issued its first (and so far only) no-action letter in September 2017 to Upstart Network Inc. stating that the