On April 14, 2021, Relman Colfax published an Initial Report in its role as fair lending Monitor of Upstart Network (“Upstart”), pursuant to an agreement between Upstart, the NAACP Legal Defense Fund (“LDF”), and the Student Borrower Protection Center (“SPBC”). Upstart’s lending platform relies on Machine Learning-based Artificial Intelligence (“ML” and “AI”) models and non-traditional applicant data—including data related to borrowers’ higher education—to underwrite and price consumer loans. LDF and the SBPC raised concerns with Upstart that the use of educational criteria can lead to discriminatory lending outcomes, particularly for communities of color. As Monitor, Relman Colfax is responsible for evaluating and making recommendations regarding the fair lending implications of Upstart’s lending platform.
The Initial Report provides context for the Monitorship, including legal and historical background regarding lending disparities and fair lending testing, a summary of Upstart’s lending program and model, and a description of studies and communications related to Upstart from the SBPC, LDF, and members of Congress. Future periodic reports will address fair lending tests conducted and recommendations specific to Upstart’s model.