Upstart Clears First Regulatory Hurdle in Bid to Launch AI-First National Bank
Upstart Clears First Regulatory Hurdle in Bid to Launch AI-First National Bank #
Upstart Holdings has received conditional approval from the Office of the Comptroller of the Currency (OCC) to establish Upstart Bank, N.A., in its bid to become a nationally chartered depository institution.
The company, which trades on Nasdaq under the ticker UPST, submitted its charter application to the OCC in March 2026. Upstart says the charter would help it reduce operational, regulatory, and financial complexity for itself and for the network of third-party capital partners that fund loans originated on its platform.
Paul Gu, Upstart’s co-founder and chief executive, said the company intends to continue with the remaining regulatory applications. “Upstart Bank will allow us to lower the cost of lending and bring our full product offering to all 50 states, advancing our mission to radically reduce the cost and complexity of credit for all Americans,” he said.
The conditional approval does not allow the company to begin operations. Two parallel applications remain outstanding: one with the Federal Deposit Insurance Corporation (FDIC) for deposit insurance, and a separate application to the Federal Reserve to have Upstart Holdings recognised as a bank holding company. Upstart said the bank will not open until all required approvals are in place and all conditions attached to the OCC’s decision are satisfied, including requirements around capitalisation, governance, and operational readiness, the standard thresholds for any newly chartered, or de novo, national bank.
When it opens, Upstart Bank, N.A. is planned to be headquartered in Delaware and will operate without physical branches. Upstart describes it as the first nationally chartered bank built from the ground up around AI-powered underwriting, a model the company has developed through its marketplace lending business.
Upstart currently works with a network of bank and credit union partners that use its platform to originate personal, auto, and small-dollar loans. A bank charter would give the company direct access to federally insured deposits as a funding source, reducing its reliance on those partnerships and on capital markets. The announcement was made on Thursday, 23 July.
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