SAN MATEO, Calif. — Digital lender Upstart has applied for a U.S. banking charter, becoming the latest financial technology company seeking to operate as a federally regulated bank.
The company said it submitted applications to the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. to establish an insured national bank. Upstart also plans to apply to the Federal Reserve for approval to become a bank holding company.
Upstart said the move would allow it to expand its lending operations and streamline partnerships with banks, credit unions and institutional investors that currently fund loans on its platform.
‘Time is Right’
“The time is right to launch the first bank built from the ground up on AI,” Paul Gu, Upstart’s chief technology officer and incoming CEO, said in a news release.
Gu said applying for a charter represents a “natural evolution” for the company as it has grown in size and broadened its product offerings.
Upstart, which uses artificial intelligence to evaluate borrowers and originate personal loans through partner financial institutions, said operating as a bank would allow it to deliver loans more efficiently and help borrowers save time and money.
