Theorem is marketing its first-ever securitization of unsecured loans. It uses machine-learning technology to gauge the risk of default, a growing concern during the pandemic recession.
The Conference of State Bank Supervisors, banking law scholars and consumer advocacy organizations filed amicus briefs siding with the New York State Department of Financial Services in its court battle with the federal regulator.
Similar to a law passed two years ago in California, legislation headed to the New York governor’s desk would require fintech and other nonbank lenders to uniformly disclose total cost of capital, APR and other metrics to potential borrowers.
The online lender has already branched out into facilitating payments and analyzing cash flow for small-business customers. Its new checking account is meant to round out those services.
If it’s approved, the charter is expected to lower the fintech’s cost of funds and allow for more product offerings. It comes nearly three years after SoFi pulled the plug on an earlier effort to open an industrial bank.
Upstart, which specializes in the use of alternative data and AI in credit decisions, will make car loans directly and sell its technology to banks and other lenders.
