CFPB no-action letter gathers information on alternative data for lending decisions

This story appeared in Bank Digest.                                  

The Consumer Financial Protection Bureau has issued a no-action letter to a company that uses alternative data in making credit and pricing decisions. Under the letter, the company, Upstart Network, Inc., must regularly report lending and compliance information to the CFPB to mitigate risk to consumers and aid the Bureau's understanding of the real-world impact of alternative data on lending decision-making. According to the CFPB's press release, the no-action letter signifies that the Bureau currently has no intent to initiate supervisory or enforcement actions against Upstart.