To further investigate the real-world impact of using alternative data in lending decisions, the Consumer Financial Protection Bureau (CFPB) recently granted an online company’s request for a no-action letter, regarding its non-traditional method of determining consumer creditworthiness.
The letter stipulates that the company, Upstart Network, Inc., based in San Carlos, Calif., will regularly report lending and compliance information to the CFPB to mitigate risk to consumers, and help with the bureau’s alternative data research.
Find out more about what information the company will be required to disclose and the bureau’s intent behind the letter.