{ "id": "AIBD-0175", "title": "More loan approvals at lower rates in a simulation", "summary": "Upstart estimated 27% more approvals and 16% lower annual percentage rates in a simulation. A 2024 independent review found approval disparities for Black applicants.", "date_observed": "2019-08-06", "date_basis": "unassessed", "date_precision": "unassessed", "benefit_status": null, "source_collection": null, "source_entry": null, "account": "The Consumer Financial Protection Bureau reported results from the compliance plan attached to its first no-action letter, granted to Upstart Network in September 2017. The results were in a 6 August 2019 blog post by Patrice Alexander Ficklin and Paul Watkins. Upstart compared its tested model with a hypothetical traditional model using conventional variables. It reported that the tested model approves 27% more applicants and yields 16% lower average APRs for approved loans. Acceptance rates were up 23–29% and APRs down 15–17% across racial, ethnic and sex categories. Near-prime applicants (FICO 620–660) were approved approximately twice as frequently. Applicants under 25 were 32% more likely to be approved and those with incomes under $50,000 13% more likely. The post states that the results for minority, female and 62-and-older applicants show no disparities requiring further fair-lending analysis. The post says that they reflect the net effect of both the alternative data and the machine-learning methodology. Upstart supplied the analysis. The CFPB expressly stated that it did not separately replicate it. On 8 June 2022 the CFPB terminated the 2020 no-action letter at Upstart's request after Upstart planned to expand the variables in its model. On 27 March 2024 the NAACP Legal Defense Fund and the Student Borrower Protection Center announced Relman Colfax's final independent-monitorship report. It found no proxies for protected classes and no pricing disparities but identified approval disparities for Black applicants. Upstart rejected the monitor's proposed less discriminatory alternative model.", "category": "general benefit", "unexpected": false, "purpose": "Underwrite and price unsecured consumer loans using alternative data and machine learning.", "system": "Upstart Network underwriting and pricing model", "model_version": null, "developer": "Upstart Network, Inc.", "deployer": "Upstart Network, Inc.", "location": null, "domain": "Consumer credit", "segment": "Unsecured personal loans and credit access", "benefit_type": "Increased Inclusion", "taxonomy_note": "The good is credit approval for applicants a traditional model would reject, which the type's “acceptance” names only broadly, and a 2024 monitor found approval disparities.", "registry_ids": {}, "ratings": [ { "group": "personal", "depth": null, "reason": "Approval and pricing effects are reported as aggregate rates over Upstart's applicant pool, with no individually attributable outcome." }, { "group": "societal", "depth": null, "reason": "Sources describe aggregate access effects and later disparities; no societal outcome is measured." } ], "ai_role": { "status": "assessed", "statement": "The CFPB states that the reported gains reflect the net effect of both the alternative data and the machine-learning methodology. So the model's contribution cannot be separated from its data. Upstart developed and deployed the model and supplied the comparison. The independent monitor later found approval disparities for Black applicants and disagreed with Upstart about a less discriminatory alternative." }, "evidence": [ { "kind": "other", "citation": "Patrice Alexander Ficklin and Paul Watkins, Consumer Financial Protection Bureau blog, 6 August 2019", "title": "An update on credit access and the Bureau's first No-Action Letter", "url": "https://www.consumerfinance.gov/about-us/blog/update-credit-access-and-no-action-letter/", "date": "2019-08-06", "written_by": "independent", "quote": "27% more applicants than the traditional model" }, { "kind": "press release", "citation": "Consumer Financial Protection Bureau, newsroom, 8 June 2022", "title": "CFPB Issues Order to Terminate Upstart No-Action Letter", "url": "https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-order-to-terminate-upstart-no-action-letter/", "date": "2022-06-08", "written_by": "independent", "quote": "needed sufficient time to review and rigorously evaluate the implications of the changes to Upstart's model", "supports_benefit": false }, { "kind": "report", "citation": "Relman Colfax PLLC, Final Report of the Independent Monitor (March 2024), executive summary, pp. 3–5, and §§ A–B. Released on March 27, 2024.", "title": "Final Report of the Independent Monitor", "url": "https://www.relmanlaw.com/media/cases/1511_Upstart%20Final%20Report.pdf", "date": "2024-03-27", "written_by": "independent", "quote": null, "supports_benefit": false } ], "replication": { "produced_by": [ "Alternative data combined with machine-learning underwriting, compared against a hypothetical traditional model on Upstart's own applicant pool", "A regulatory compliance plan requiring fair-lending testing and reporting" ], "must_hold": [ "An applicant pool and comparison model similar to the 2019 test", "Fair-lending testing that measures approval as well as pricing disparities", "Independent monitoring, which in 2024 found approval disparities the 2019 test did not report" ], "echoes": [ { "date": "2022-06-08", "setting": "CFPB termination of the 2020 no-action letter", "model_version": null, "outcome": "unknown", "source": "CFPB order; no results stated" }, { "date": "2024-03-27", "setting": "Relman Colfax monitorship of Upstart for LDF and SBPC", "model_version": null, "outcome": "unknown", "source": "LDF press release: no pricing disparities but approval disparities for Black applicants" } ] }, "paired_incident": null, "headline": "More loan approvals at lower rates in a simulation", "metric": "approving 27% more applicants at 16% lower APRs than a traditional model", "comparator": { "against": "a hypothetical model using traditional application and credit file variables without machine learning", "before": "approval rate and average APRs of the traditional model (not quantified)", "after": "approves 27% more applicants than the traditional model, and yields 16% lower average APRs for approved loans", "basis": "measured", "quote": "The results provided from the access-to-credit comparisons show that the tested model approves 27% more applicants than the traditional model, and yields 16% lower average APRs for approved loans.", "url": "https://www.consumerfinance.gov/about-us/blog/update-credit-access-and-no-action-letter/" }, "later": { "status": "challenged", "date": "2024-03-27", "note": "The independent monitor found approval disparities for Black applicants and proposed a less discriminatory alternative. Upstart and the monitor did not agree on adopting it. The earlier termination of the no-action letter was an administrative action, not litigation.", "quote": null, "url": "https://www.relmanlaw.com/media/cases/1511_Upstart%20Final%20Report.pdf" }, "value": null, "developer_country": "United States", "deployer_country": "United States", "unrated_because": null, "brief_notes": null, "brief": null, "revisions": [ { "date": "2026-10-20", "change": "Record drafted from the cited sources.", "source": null, "editor": "AIBD" }, { "date": "2026-10-21", "change": "Headline reworded to state the event without naming who claims it.", "source": null, "editor": "AIBD" }, { "date": "2026-10-21", "change": "Title reworded to state the event without naming who claims it.", "source": null, "editor": "AIBD" }, { "date": "2026-10-21", "change": "Benefit type set to Increased Inclusion under Trustible's full taxonomy of 23 types; it was Improved Accessibility among the six first used.", "source": "https://trustible.ai/post/a-framework-for-measuring-the-benefits-of-ai/", "editor": "AIBD" }, { "date": "2026-10-21", "change": "Added what the benefit is measured against, what happened since from the cited sources.", "source": "https://www.consumerfinance.gov/about-us/blog/update-credit-access-and-no-action-letter/; https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-order-to-terminate-upstart-no-action-letter/", "editor": "AIBD" }, { "date": "2026-10-21", "change": "Country of the developer and the deployer added from the organization's own site or a registry.", "source": "https://www.upstart.com/about; https://www.upstart.com/about", "editor": "AIBD" }, { "date": "2026-10-21", "change": "Prose pass: account, the system's part rewritten in shorter sentences with abbreviations expanded; facts, figures and quotations unchanged.", "source": null, "editor": "AIBD" }, { "date": "2026-10-25", "change": "Reviewed the specified original sources; corrected their authorship, document types, and support for the reported benefit.", "source": "https://www.consumerfinance.gov/about-us/blog/update-credit-access-and-no-action-letter/", "editor": "AIBD" } ], "confidence": "claimed", "shade": "low", "claim_status": "Listed, not verified", "claim_basis": "Sources: one independent report, one independent press release and one other independent source. 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The results were in a 6 August 2019 blog post by Patrice Alexander Ficklin and Paul Watkins. Upstart compared its tested model with a hypothetical traditional model using conventional variables. It reported the tested model approves 27% more applicants and yields 16% lower average APRs for approved loans. Acceptance rates were up 23–29% and APRs down 15–17% across racial, ethnic and sex categories. Near-prime applicants (FICO 620–660) were approved approximately twice as frequently. Applicants under 25 were 32% more likely to be approved and those with incomes under $50,000 13% more likely. The post states that the results for minority, female and 62-and-older applicants show no disparities requiring further fair-lending analysis. The post says they reflect the net effect of both the alternative data and the machine-learning methodology. Upstart supplied the analysis. The CFPB expressly stated that it did not separately replicate it. On 8 June 2022 the CFPB terminated the 2020 no-action letter at Upstart's request after Upstart planned to expand the variables in its model. On 27 March 2024 the NAACP Legal Defense Fund and the Student Borrower Protection Center announced Relman Colfax's final independent-monitorship report. It found no proxies for protected classes and no pricing disparities but identified approval disparities for Black applicants. Upstart rejected the monitor's proposed less discriminatory alternative model.", "benefit_type": "Increased Inclusion" } }, "provenance": { "kind": "legacy_record", "basis": "Preserved from the existing AIBD record; external sources were not rechecked.", "record_fields": [ "account", "benefit_type" ], "source_refs": [] }, "review_state": "record_mapped", "coverage": "partial" }, "outcomes[].distribution": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial" }, "outcomes[].duration": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial" }, "outcomes[].id": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial" }, "outcomes[].stakeholder_group": { "state": "value_present", "value": { "kind": "record_fields", "fields": { "ratings": [ { "group": "personal", "reason": "Approval and pricing effects are reported as aggregate rates over Upstart's applicant pool, with no individually attributable outcome." }, { "group": "societal", "reason": "Sources describe aggregate access effects and later disparities; no societal outcome is measured." } ] } }, "provenance": { "kind": "legacy_record", "basis": "Preserved from the existing AIBD record; external sources were not rechecked.", "record_fields": [ "ratings" ], "source_refs": [] }, "review_state": "record_mapped", "coverage": "partial" }, "outcomes[].status": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial" }, "outcomes[].tradeoffs": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial" }, "outcomes[].unexpected": { "state": "value_present", "value": { "kind": "record_fields", "fields": { "unexpected": false, "purpose": "Underwrite and price unsecured consumer loans using alternative data and machine learning." } }, "provenance": { "kind": "legacy_record", "basis": "Preserved from the existing AIBD record; external sources were not rechecked.", "record_fields": [ "unexpected", "purpose" ], "source_refs": [] }, "review_state": "record_mapped", "coverage": "partial" }, "places[]": { "state": "value_present", "value": { "kind": "record_fields", "fields": { "developer_country": "United States", "deployer_country": "United States" } }, "provenance": { "kind": "legacy_record", "basis": "Preserved from the existing AIBD record; 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corrected their authorship, document types, and support for the reported benefit.", "source": "https://www.consumerfinance.gov/about-us/blog/update-credit-access-and-no-action-letter/", "editor": "AIBD" } ] } }, "provenance": { "kind": "legacy_record", "basis": "Preserved from the existing AIBD record; external sources were not rechecked.", "record_fields": [ "revisions" ], "source_refs": [] }, "review_state": "record_mapped", "coverage": "partial" }, "sector": { "state": "value_present", "value": { "kind": "record_fields", "fields": { "domain": "Consumer credit", "segment": "Unsecured personal loans and credit access" } }, "provenance": { "kind": "legacy_record", "basis": "Preserved from the existing AIBD record; external sources were not rechecked.", "record_fields": [ "domain", "segment" ], "source_refs": [] }, "review_state": "record_mapped", "coverage": "partial" }, "sources[].access_version": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial" }, "sources[].citation_locator": { "state": "value_present", "value": { "kind": "record_fields", "fields": { "evidence": [ { "kind": "other", "citation": "Patrice Alexander Ficklin and Paul Watkins, Consumer Financial Protection Bureau blog, 6 August 2019", "title": "An update on credit access and the Bureau's first No-Action Letter", "url": "https://www.consumerfinance.gov/about-us/blog/update-credit-access-and-no-action-letter/", "date": "2019-08-06", "written_by": "independent", "quote": "27% more applicants than the traditional model" }, { "kind": "press release", "citation": "Consumer Financial Protection Bureau, newsroom, 8 June 2022", "title": "CFPB Issues Order to Terminate Upstart No-Action Letter", "url": "https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-order-to-terminate-upstart-no-action-letter/", "date": "2022-06-08", "written_by": "independent", "quote": "needed sufficient time to review and rigorously evaluate the implications of the changes to Upstart's model", "supports_benefit": false }, { "kind": "report", "citation": "Relman Colfax PLLC, Final Report of the Independent Monitor (March 2024), executive summary, pp. 3–5, and §§ A–B. 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Other fields and sources were not comprehensively reassessed." } }, "provenance": { "kind": "source_review", "basis": "A limited source-role review; each inspected source and its contribution is identified.", "record_fields": [], "source_refs": [ "AIBD-0175-source-0001", "AIBD-0175-source-0002", "AIBD-0175-source-0003" ], "reviewed_on": "2026-10-25" }, "review_state": "reviewed", "coverage": "partial", "display": { "answer": "Upstart supplied the approval and APR estimates. CFPB published them without replicating them. The later independent monitor examined fairness and identified approval disparities for Black applicants." } }, "strategic_assessments[]": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial", "family": "strategic assessments" }, "summary": { "state": "value_present", "value": { "kind": "record_fields", "fields": { "summary": "Upstart estimated 27% more approvals and 16% lower annual percentage rates in a simulation. 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The post states that the results for minority, female and 62-and-older applicants show no disparities requiring further fair-lending analysis. The post says that they reflect the net effect of both the alternative data and the machine-learning methodology. Upstart supplied the analysis. The CFPB expressly stated that it did not separately replicate it. On 8 June 2022 the CFPB terminated the 2020 no-action letter at Upstart's request after Upstart planned to expand the variables in its model. On 27 March 2024 the NAACP Legal Defense Fund and the Student Borrower Protection Center announced Relman Colfax's final independent-monitorship report. It found no proxies for protected classes and no pricing disparities but identified approval disparities for Black applicants. Upstart rejected the monitor's proposed less discriminatory alternative model." } }, "provenance": { "kind": "legacy_record", "basis": "Wording aligned with the source review of 25 October 2026; the longer account retains previously collected details.", "record_fields": [ "summary", "account" ], "source_refs": [] }, "review_state": "record_mapped", "coverage": "partial" }, "systems[].autonomy_permissions": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial" }, "systems[].component_role": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial" }, "systems[].deployment_configuration": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial" }, "systems[].inputs_outputs": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial" }, "systems[].model_name": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial" }, "systems[].model_version": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial" }, "systems[].product_name": { "state": "value_present", "value": { "kind": "record_fields", "fields": { "system": "Upstart Network underwriting and pricing model" } }, "provenance": { "kind": "legacy_record", "basis": "Preserved from the existing AIBD record; external sources were not rechecked.", "record_fields": [ "system" ], "source_refs": [] }, "review_state": "record_mapped", "coverage": "partial" }, "systems[].provider": { "state": "value_present", "value": { "kind": "structured", "data": { "application_developer": "Upstart Network, Inc." } }, "provenance": { "kind": "legacy_record", "basis": "Mapped from the existing case description without a new external source review.", "record_fields": [ "developer" ], "source_refs": [] }, "review_state": "record_mapped", "coverage": "partial" }, "taxonomy_crosswalks[]": { "state": "not_assessed", "review_state": "not_assessed", "coverage": "partial" }, "title": { "state": "value_present", "value": { "kind": "record_fields", "fields": { "title": "More loan approvals at lower rates in a simulation", "headline": "More loan approvals at lower rates in a simulation" } }, "provenance": { "kind": "legacy_record", "basis": "Wording aligned with the source review of 25 October 2026; the longer account retains previously collected details.", "record_fields": [ "title", "headline" ], "source_refs": [] }, "review_state": "record_mapped", "coverage": "partial" }, "version": { "state": "value_present", "value": { "kind": "identifiers", "identifiers": [ "058110bb515dd923a9bf7d96c8701119c79627d0248fb6d63f9c1d61b7a83046" ], "role": "SHA-256 of normalized original case data" }, "provenance": { "kind": "curatorial", "basis": "Deterministic content version assigned by the local migration.", "record_fields": [], "source_refs": [] }, "review_state": "record_mapped", "coverage": "complete" }, "workflow": { "state": "value_present", "value": { "kind": "record_fields", "fields": { "account": "The Consumer Financial Protection Bureau reported results from the compliance plan attached to its first no-action letter, granted to Upstart Network in September 2017. The results were in a 6 August 2019 blog post by Patrice Alexander Ficklin and Paul Watkins. Upstart compared its tested model with a hypothetical traditional model using conventional variables. It reported the tested model approves 27% more applicants and yields 16% lower average APRs for approved loans. Acceptance rates were up 23–29% and APRs down 15–17% across racial, ethnic and sex categories. Near-prime applicants (FICO 620–660) were approved approximately twice as frequently. Applicants under 25 were 32% more likely to be approved and those with incomes under $50,000 13% more likely. The post states that the results for minority, female and 62-and-older applicants show no disparities requiring further fair-lending analysis. The post says they reflect the net effect of both the alternative data and the machine-learning methodology. Upstart supplied the analysis. The CFPB expressly stated that it did not separately replicate it. On 8 June 2022 the CFPB terminated the 2020 no-action letter at Upstart's request after Upstart planned to expand the variables in its model. On 27 March 2024 the NAACP Legal Defense Fund and the Student Borrower Protection Center announced Relman Colfax's final independent-monitorship report. It found no proxies for protected classes and no pricing disparities but identified approval disparities for Black applicants. Upstart rejected the monitor's proposed less discriminatory alternative model.", "replication": { "produced_by": [ "Alternative data combined with machine-learning underwriting, compared against a hypothetical traditional model on Upstart's own applicant pool", "A regulatory compliance plan requiring fair-lending testing and reporting" ], "must_hold": [ "An applicant pool and comparison model similar to the 2019 test", "Fair-lending testing that measures approval as well as pricing disparities", "Independent monitoring, which in 2024 found approval disparities the 2019 test did not report" ], "echoes": [ { "date": "2022-06-08", "setting": "CFPB termination of the 2020 no-action letter", "outcome": "unknown", "source": "CFPB order; no results stated" }, { "date": "2024-03-27", "setting": "Relman Colfax monitorship of Upstart for LDF and SBPC", "outcome": "unknown", "source": "LDF press release: no pricing disparities but approval disparities for Black applicants" } ] } } }, "provenance": { "kind": "legacy_record", "basis": "Preserved from the existing AIBD record; external sources were not rechecked.", "record_fields": [ "account", "replication" ], "source_refs": [] }, "review_state": "record_mapped", "coverage": "partial" } }, "summary": { "total": 91, "addressed": 91, "known": 29, "reviewed": 2, "record_mapped": 27, "not_assessed": 62, "complete": false, "by_state": { "value_present": 29, "not_reported": 0, "unresolved": 0, "not_assessed": 62, "not_applicable": 0, "withheld": 0, "source_unavailable": 0 } } } }