Upstart Nears Full Regulatory Go-Ahead for In-House Bank

Fintech lender Upstart is moving closer to launching its own banking arm, having secured conditional approval from the Office of the Comptroller of the Currency (OCC) to form Upstart Bank. The company has been working toward this milestone for years, seeking to reduce its reliance on third-party bank partners and gain greater control over its lending operations.

Conditional OCC approval typically means the fintech must still satisfy a set of outstanding requirements before it can begin operating as a full-fledged bank. Upstart will need to demonstrate it meets capital, management, and compliance standards, as well as obtain approval from the Federal Deposit Insurance Corporation (FDIC) for deposit insurance.

Once fully approved, Upstart Bank would allow the company to hold loans on its own balance sheet and offer deposit products, further integrating its AI-driven lending platform with traditional banking services. The move could reshape the competitive landscape for online lenders seeking to bypass the conventional banking system.