By: Annie Delgado, Chief Risk Officer at Upstart
In the 10 years I’ve been at Upstart, I’ve learned that what we’re building isn’t just software – it’s a shared journey. We talk a lot about talent, integrity, and ambition, but lately, I’ve been thinking about what it actually takes to live up to our biggest aspiration: becoming the most radically pro-consumer company in finance.
For me, that’s not just a corporate slogan. It’s personal.
I’m the product of a single mom who raised three kids while working and putting herself through nursing school. She borrowed money to make ends meet, and becoming a nurse eventually allowed her to qualify for a mortgage. That mortgage gave our family stability. She raised three college-educated kids, paid off her home, and retired at 70.
That’s the happy ending. The harder truth is that credit came with years of stress and sacrifice. It unlocked a door for our family — but it wasn’t as affordable or accessible as it should have been.
So, when we ask how to make credit cheaper and more accessible, we aren’t just looking at data points. We’re looking at lives. To change those lives at scale, we have to confront a hard truth: You can’t drive an F1 race car on a cobblestone road.
The Car and the Cobblestones: For over a decade, we’ve focused on building an incredible “car.” We believed that better math and AI could make risk assessment more precise and fair. And we proved it. Compared to traditional FICO-driven models, Upstart’s AI approves 43% more applicants at 33% lower APRs. We’ve achieved 13x risk separation between our highest and lowest risk tiers compared to the industry standard of 3x, facilitated over 5 million loans, and fully automated 91% of loans.¹
Our vehicle is world-class, but as we’ve continued to improve our performance, we’ve realized the road we are driving on needs work.
Today, a single Upstart loan travels through a maze of marketing partners, lending partners, warehouse lenders, loan buyers, and regulators. To support our customers, we maintain 248 separate state licenses.
This system reflects decades of thoughtful policymaking designed to protect consumers within state borders. But it wasn’t built for a digital platform operating nationally in real time. The result is duplication, complexity, and uneven access for borrowers depending on where they live.
That fragmentation carries real cost — in time, coordination, and dollars — that ultimately flows back to the consumer.
The Cost of the Status Quo: Last year alone, capital and regulatory infrastructure costs amounted to approximately $200 million to support loan originations nationally. Those dollars reflect coordination across multiple institutions and jurisdictions — not improvements to our technology or service. At scale, that translates to roughly $135 per loan. Reducing that structural overhead is one of the most direct ways we can make credit more affordable.
But the impact goes beyond cost — it affects access.
In 2024, an estimated 40,000 consumers were unable to apply for a personal loan through Upstart because our products were not available in every jurisdiction. We never had the chance to evaluate their creditworthiness. Our Small Dollar Loan product is similarly unavailable in roughly one-fifth of the country.
For a digital platform built on individualized risk assessment, geographic barriers limit our ability to treat similarly situated borrowers the same way.
No amount of engineering on the car can fix a road that simply doesn’t go where the people are. To be truly pro-consumer, we have to improve the constraints themselves.
Introducing Upstart Bank
This realization led us to a question: If we were starting today, how would we build the road?
The answer is: to create a smoother path for Upstart, our customers and our lending partners, we are officially beginning the journey to open Upstart Bank.
If approved, Upstart Bank will originate and service unsecured, auto, and home loans nationwide under one streamlined federal framework. Upstart Bank will sell the overwhelming majority of loans to our lending partners and other capital providers while using its balance sheet to support bank operations as well as R&D. Upstart Bank will operate as a separately regulated sister company alongside our technology platform.
Think of it this way:
- Upstart Network remains the car – the AI engine, the underwriting intelligence, and the product experience.
- Upstart Bank becomes the road – the regulated infrastructure and the direct, simplified path for capital to move to the borrower.
- Together they comprise Upstart – the most radically pro consumer finance company.
By launching Upstart Bank, we can deliver a more consistent experience to every borrower — with one set of credit parameters and protections applied uniformly, regardless of geography or partner structure.
Today, serving customers nationally requires coordinating across more than 100 origination partners, multiple federal regulators, and 50 separate state licensing frameworks. With Upstart Bank, we move toward a single primary federal regulator and a unified operating structure. In practical terms, that means replacing 248 separate state licenses with one streamlined framework designed for national scale to meet the needs of more consumers and lending partners.
Why This Makes Us Faster: Some might assume that opening a regulated bank will slow us down. We will need to invest in Upstart Bank to meet regulatory expectations. Despite that, in practice, we believe the bank will actually allow us to move with greater clarity and speed.
Today, delivering products through a broad network of partner banks and credit unions requires careful coordination and alignment across regulated institutions. That collaboration is a strength — it brings diverse perspectives and rigorous oversight. But it also means that even small changes must be sequenced thoughtfully across multiple stakeholders, and that Upstart must meet regulatory expectations without direct engagement with and direction from the regulators.
With Upstart Bank, accountability becomes more direct. We engage with a single primary regulator, align internally, and implement improvements within a unified framework. Instead of coordinating across institutions, we concentrate responsibility within one structure — reducing complexity while maintaining rigor.
The Path Ahead: This is a multi-year journey. And it won’t be easy. In the coming weeks, we will meet with the Office of the Comptroller of the Currency (OCC), the federal agency that will serve as the primary regulator for Upstart Bank, to submit our application. This will be followed by months of rigorous regulatory dialogue. If approved, we will spend the latter half of 2026 building the bank and continuing to engage with the regulators, with a target to begin operations in early 2027.
Opening a bank is the right hard thing. It requires discipline, patience, and a higher level of rigor than ever before. But we’ve already proven we can do the hard things. We did it with AI underwriting when the world said traditional credit scores were enough. We’re doing it again now with infrastructure.
We aren’t doing this for a headline or for prestige. We’re doing it because nothing should stand between a creditworthy consumer and the opportunity they’ve earned. Not uneven structures, not unnecessary cost layers, and not fragmented accountability.
The engine stays world-class. The road gets straighter. And the destination remains exactly the same.
On your mark, get set, let’s go!
Please see our press release for more information: Upstart to Apply for National Bank Charter
- Figures reflect the most recently available data for loans originated during the periods specified: approval and APR comparisons are based on full year 2024; risk separation reflects July 2021 through May 2025; facilitated loans represent cumulative originations from inception through Q4 2025; and the percentage of loans fully automated corresponds to Q4 2025.