Latest / Leaders in Lending / Navigating Global and Personal Financial Crises with FinTech

Transcript

Navigating Global and Personal Financial Crises with FinTech · Leaders in Lending

0:02
You are listening to Leaders in Lending from Upstart, a podcast dedicated to helping
0:07
consumer lenders grow their programs and improve their product offerings. Each week, here,
0:13
decision makers in the finance industry offer insights into the future of the lending
0:17
industry, best practices around digital transformation, and more. Let's get into the
0:22
show. Hi, this is Lynd sutter Bille of Upstart, and welcome to
0:29
Leaders and Lending. I'll be joined today by Penny Lee, who is the
0:32
President and CEO of the Financial Technology Association, a Washington, DC based trade
0:38
association representing fintech industry leaders. The FTA educates, informs, and engages with
0:44
Washington, advocating for modernized policies and regulations that spur innovation and drive inclusion.
0:49
Let's get started, Hi, Penny, thanks for joining me today on Leaders
0:53
Lending. Thanks for having me, Lynne is a great honor and pleasure to
0:56
be here. Great well. Your website says that the FTA educates, informs,
1:02
and engages with Washington, and you're advocating for modernized policies regulations that spur
1:07
innovation drive inclusion. Can you expand on that. We're kind of in your
1:11
words, describe the mission of the organization. Sure, yet it's a little
1:15
bit taking out the word salad, as they would say. And so what
1:19
we do is we represent the fintech industry and kind of a wide aperture of
1:23
how we define it, primarily as digitally native financial services companies, and so
1:30
those are things that people use on an everyday basis, whether or not to
1:34
have their DoorDash delivered and paid for. But a buy now, pay later
1:38
product, a P two P venmo a cash app, all those kind of
1:42
horizon. And what we do is we sit in the nexus of Washington and
1:47
try to translate business to Washington and Washington to business and try to work with
1:53
the regulators, legislators and others to craft and think through how to put the
1:59
US kind of in the forward looking phase of what is the future of finance,
2:02
meaning what are the regulations that we need to put in place that modernize
2:07
to fit the products and services that are now in the marketplace. What is
2:12
the type of legislation we need to look at, or what are the types
2:15
of things we need to adopt again to make sure that the US remains competitive
2:21
not only in the products and services that they offer consumers and small businesses,
2:24
but also in a global sense. We're now in a global world economy and
2:29
in a global competitive landscape, so we want to make sure that our consumers
2:35
when they're traveling overseas, has accessed that our rules and regulations allow for this
2:39
free flow of money, but also to use the ingenuity that is occurring kind
2:45
of on a global scale to be able to have that adopted here in the
2:47
United States. Yeah, that's interesting. So I know there's a few different
2:53
kind of fintech or financial industry associations growing up, and I do think they
2:58
really have to focus on different areas and what in your mind, really differentiates
3:01
than the FTA from some of the other organizations I would see. You know,
3:07
it was started kind of to try to address kind of the larger fintech
3:12
industry, and so we made as I said, we made the definition of
3:16
it broad but yet narrow in the sense of trying to capture all that is
3:22
encompassing of you know, financial technology or those products and services that are in
3:27
that space. And so we don't focus on where some might have a more
3:30
niche where they're representing just those that are in the lending space or just those
3:36
that are in the data aggregation space, or just those that are in just
3:40
a little bit more of a niche area. So we try to represent those
3:45
that are in lending, those are in payments, those that are in the
3:49
capital market space, those that are in binanal pipulator or earned wage access or
3:54
other you know, kind of what makes this ecosystem of fintech. So trying
4:00
to represent the broader industry. Okay, now that was certainly helpful. So,
4:04
and I think you personally have a really interesting career background, kind of
4:10
a combination of politics, policy, angel investing. Tell us about that.
4:15
You know, what your career path looked like, what different areas have you
4:17
worked in, and kind of how you ended up rather leading the FTA.
4:21
So it started first love was in campaigns. I volunteered for my first campaign
4:27
when I was fourteen years old, and that was the path I was going
4:30
to go study political science and journalism in college. And then immediately after college
4:35
got connected with the campaign in Texas and then just that spurred kind of that
4:41
work that I did there for many years was with Democratic Party and worked on
4:46
a couple was the privilege of working on a couple of presidentials, and then
4:51
was with a governor in Pennsylvania, Governor Rendell, and then from there was
4:55
recruited out to run the Democratic Governors Association, and then that le me into
5:00
working with then majority leader in the Senate, Harry Reid, and it was
5:05
during that time was hired in seven and during that time we obviously faced a
5:11
financial crisis in eight and it was an incredible moment in time to be part
5:17
of that conversation, but also a very heady days, very scary days,
5:21
very defining moments that we had periodically throughout that But what we did see was
5:28
it was a time where, you know, there was always this kind of
5:31
disdain to have to engage in Washington and kind of a they don't really understand
5:35
what we're doing anyway, so a kind of an avoidance of Washington. And
5:40
what Owait really proved across all different sectors was you neque to spend time in
5:46
Washington because there might be a time on one they need to bail you out,
5:49
or two that you have to make sure that they understand what your products
5:54
do and don't do. And so when I left the Hill, that was
5:57
something that I carried out with me was again trying to not be scared of
6:01
Washington, but also the lessons that you learn in those companies that had taken
6:06
the time to educate along the way that it wasn't only in a crisis that
6:12
they were coming to Washington, that it wasn't only in a negative light,
6:15
but had systematically and periodically showed up time and time again. So we had
6:20
a good understanding. You know, that really illustrated one night early in the
6:26
days of the financial crisis. I never forget that first time we really had
6:30
Secretary Paulson and Chairman Bernank come to the Hill and, you know, to
6:34
present kind of what was happening because all of a sudden, incredible amounts of
6:39
activities. Bear Stearns was in trouble, AIG was in trouble, like all
6:43
of this activity was going on. And it was a first meeting in which
6:46
we expanded it to more than just leadership staff, and that was the banking
6:50
staffs and financial services and all the different staff in the room. So it's
6:54
probably about fifty people with principles and staff. And you know, I'll never
6:58
forget Secretary of Pulse and asking, okay, just want to understand the room,
7:02
who has ever traded a derivative? You know, no hand goes up
7:08
and he's like, Okay, who's ever worked on Wall Street? Not a
7:13
hand goes up and he's like, okay, so this is going to be
7:15
a theoretical exercise. And you know, he you know, slowly educated us
7:20
all on kind of some of the nuances. But you know, he was
7:25
an own personal relationship that he had with the Wall Street community and others that
7:30
kind of helped us lead us to a place where we ended up getting to
7:34
with the TARP and other aspects. But that kind of illustrated how important it
7:40
is to again maintain that conversation, develop those relationships. So when there is
7:46
a time of crisis or need or trying to think forward, how do we
7:51
reshape the United States? You know right now on kind of what this future
7:56
of finance looks like, that process is there, and so that's kind of
8:01
translated to where I am now. I came into this role working at a
8:05
firm called Invariant, a lobbying and public affairs firm, and we had several
8:11
fintech clients and it was them that recruited me to ask if I'd be interested
8:16
in building out this new trade association that represented the larger industry Okay, great
8:22
now. I love that anecdote about Sexuary Paulsen. During the Great Financial Crisis,
8:26
I also did a lot of campaign work, although I didn't translated that
8:31
into later careers. After college, I went directly into financial services. And
8:35
I always tell people that campaign politics is in many ways kind of a hand
8:39
to hand combat, and it really prepares you for a lot of difficult situations
8:43
over the course of your career, and I think people who have that experience
8:48
tend to kind of roll with it. Challenging things happened because you started out
8:52
early with difficult bosses and a variety of experiences, you know, in a
8:58
way, I was actually working at Smith Barney at the time, which does
9:03
not exist as a company anymore. So I was working for an institutional consulting
9:07
team, certainly d of Spelt, and saw the industry disruption firsthand. Although
9:13
although not in New York or DC. Were there times during those years where
9:18
you felt like, we don't know where this is going to end, and
9:22
we think the landing could be could be very very hard, and just the
9:26
unknowns, Like what was that like from a I think emotion standpoint of really
9:30
being in the room where a lot of really important things happened. It was
9:33
you know, you didn't know, you didn't know how big the contagion was,
9:37
you didn't know, you didn't necessarily know other than the banking community also
9:43
what was being affected. And then you had the global component on it.
9:48
And so it was every hour, every day realizing this. Well it might
9:52
have just seemed isolated initially to a housing and to Wall Street and to some
9:58
niche products that were you know, oversecuritize or over exercise. It. Then
10:03
every day became bigger and larger, and then you had multinational companies saying,
10:09
I can't make payroll. The banks have called the paper we leverage on a
10:13
daily basis just to meet payroll. We're going to go under. And these
10:18
are major, major, multinational, non bank companies that were starting to feel
10:22
these overall effects. Let alone the hundreds of thousands of people that lost their
10:28
homes and trying to find, you know, a new way or how they
10:33
were going to live as well. So it was just this kind of this
10:37
complete uncertainty and you know, wanting to you know, not know, and
10:41
especially initially where to put the finger in the dike. You know, it
10:46
wasn't which problem to solve it wasn't just one sector that we could solve for,
10:50
it was multi and so I credit the leadership of Secretary Paulson and Chairman
10:56
Bernanke and the Fed governors that were involved, and the leadership in the House
11:03
in the Senate to be able to look at the landscape put politics aside.
11:07
And there was you know, some obviously some very partisan, you know,
11:11
features that have to work through, but you know, to go to the
11:13
White House and have Speaker Pelosi, to have Leader Read, to have McConnell,
11:18
and to have others there putting aside and saying what do we need to
11:22
fix this so it's not an overall collapse. And so that was what you
11:26
just didn't know. You didn't know where the floor was and which finger to
11:31
put in what you died, you know at that point. Sure. Yeah,
11:35
there's a great quote that I heard the other day, and I can't
11:37
recall offhand where I heard it, but I've repeated it and it's been repeated
11:41
by a couple of my colleagues here at upstart that you have to be willing
11:45
to sprint when the distance is unknown. Yes, exactly, Yeah, and
11:50
that is very much true when growing either a startup or a company through kind
11:54
of rapid growth phases and after well Smith Party became no more, I did
12:00
have the opportunity later on to work at JP Morgan and the Federal Reserve,
12:05
and reform around triparty repo and white paper was something that I helped implement at
12:09
the Bank as we were as I managed one of the teams that worked on
12:13
the global liquidity trading there, and so that was certainly interesting to then see
12:18
some of the cleanup. What are some of the other kind of industry changes
12:20
you saw coming out of that, like some of the positive things that you
12:24
feel like we're really done well in addition to the kind of bipartisan work to
12:28
clean up a big problem, but maybe like new regulation or new oversight that
12:35
came out of that. Yeah, well, I think, you know,
12:39
plus or minus whatever your opinion is on the Consumer Financial Protection Bureau, you
12:43
know, the creation of that bureau has a positive effect. It now has
12:50
again depending on the directorship or depending on where your perception would be, but
12:56
just having the notion that there is a regulatory body being a perspective of what
13:01
is best for the consumer. How that's interpreted is I'll leave that to others.
13:05
But that was something I think that has been overall positive to have that
13:11
notion and to have a place where consumers can go, consumers can have a
13:16
voice, and at the same time thinking through the products and services that are
13:20
in the marketplace to ensure that there is consumer protection components to it that might
13:26
not have been there prior, because you do not want you want to make
13:31
sure that every product coming into the marketplace, especially that with money that touching
13:35
consumers in small business, has the full safety and soundness, that there is
13:39
a fairness element to it as well, but can instill the trust of the
13:43
users for it. So I think that was, you know, something that
13:46
was good. Obviously, some of the aspects in the mortgage industry, some
13:52
other forums that have taken place when that respect have been good. Some of
13:56
the other consumer protection asked of some of the financial sectors. I'll let others
14:03
debate currently on Basel three endgame, but you know, there was obviously a
14:07
higher capital requirements, some of the work done on the testing of the banks
14:13
and the stress testing, and you know, just ensuring that there was a
14:16
greater dialogue occurring between again between Washington and what was happening on Wall Street.
14:22
I think has been overall a positive event. Sure, sure, And I
14:26
know you know here at Upstart, there's kind of a funny story about some
14:31
of our founders and early employees kind of walking into the OCC office in San
14:35
Francisco and just saying, Hey, we're going to do this thing and do
14:37
you want to talk to us? And that isn't very common practice, so
14:41
the regulator didn't really know what to make of them at the time either.
14:45
But we've got a long standing history, you know, through our work and
14:48
our government affairs team and engagement of our risk and compliance teams of working with
14:54
the various regulatory agencies kind of opening up the company as much as possible,
14:58
and then obviously where we have we do have state exams as a lender or
15:03
as a broker, and kind of indirectly through many of our bank partners and
15:07
credit unions that we work with, So you know, we spend a lot
15:09
of time, I think engaging with the regulators. And I definitely think that
15:13
your experience, having kind of seen the worst of what can go wrong and
15:18
where things can spiral pretty quickly, is really helpful. And there are certainly
15:22
areas in the fintech industry where people may not have that kind of global banking
15:26
perspective and have not seen things go wrong. They've only seen it go up.
15:30
And I think last year opened some people's eyes with the bank failures and
15:35
the kind of after effects of stimulus wearing off. So I know you've said
15:39
before that the FTA is really working to use innovation to better those consumers and
15:43
small business outcomes. What are some of the products and services being developed or
15:46
kind of in the market as you see most innovative or that you're really excited
15:50
about right now? Yeah, I would say that, you know, and
15:54
again going back to what you asked about coming out of eight, I would
15:56
say, separate from the regulation space, the innovation what has occurred, and
16:02
you see a lot of products that came out in response similar to started others
16:07
that were filling a marketplace gap, because what you did see was still the
16:11
need for access to credit, access to affordable credit and in a way that
16:17
could you know, reach those that might not have a credit report under bank
16:21
underserved, but do it in a way that's not predatory, that does it
16:25
in a way that allows them to be able to buy a home, finance
16:30
a car, other means, but not in a way that puts them in
16:33
incredible revolving debt or in compounding interests, you know, vehicles on that respect.
16:38
So I think there's been a lot of incredible innovation. And as we've
16:42
gone and you saw another uptick, especially on adoption during the pandemic when people
16:48
are at home, not going to a bank and having to relive their financial
16:53
lives and one that is much more digital. And so a lot of the
16:57
innovation in this space has been you know, from that from changing the way
17:02
in which we interact with financial services, how we get the delivery of money,
17:07
how we're able to just kind of work on that aspect. But it's
17:11
also just some foundational just for the ability for you to accept a credit card
17:17
online, the ability for you to for a small business to be able to
17:22
have one place where they can do their bill pay, manage their treasury,
17:26
all of that aspect of their whole you know, get access to credit is
17:32
now something that can that is an everyday occurrence. So, you know,
17:36
some of the products that are in this space that I think that are really
17:38
exciting, again building on what some of the foundational things was, I think
17:42
now it's just taken for granted that oh yeah, I can get my door
17:45
dash delivered and with a debit or credit card and it's seamless, and not
17:51
realizing it probably goes over four or five of our live intech rails to make
17:55
that happen. It just seems ubiquitous and seamless. But what you are aren't
18:00
starting just the availability again from a small business and consumer, that access to
18:06
credit and access to more affordable credit. You know, acting controllers who likes
18:11
to say being poor is expensive because it requires you oftentimes to get a higher
18:18
you know, they require a higher interest loan, or they require you know,
18:22
more having more liquidity or denial of certain aspects. So you know,
18:27
what we did see during the pandemic, especially you know, was trying during
18:32
the first phase of the PPP was trying to get money out the door if
18:36
they could, you know, people without bank accounts or without relationships with their
18:41
bank, they weren't able to access you know, this incredible program. And
18:45
so just that kind of overall need to be able to meet consumers and small
18:52
businesses where they're at using digital tools that they want and provide consumers with more
19:00
choice in the marketplace. Sure, sure, and I do think that that
19:04
is always a good quote that being poor is expensive, and I think we
19:07
all know the stats around you know what simple emergency like a car breaking down,
19:12
a medical bill, unexpected sickness where you're out from work, and how
19:17
impactful that can be on a pretty large set of population of Americans. I
19:22
think one of the new products that I know all of our listeners are familiar
19:25
with or newer products not new anymore, is by Now Pay Later or BNPL
19:30
kind of the point of sale financing, whether online or in store. I
19:33
do think the reputation sometimes can be a bit mixed. People think it's a
19:37
lot of things and aren't exactly sure what it is, especially if they don't
19:41
work directly in the fintech industry. Can you share your thoughts though, what
19:45
you see some of the benefits of those products, particularly for those consumers.
19:49
Yeah, by Appay Later is kind of almost turned into a marketing theme,
19:56
a marketing tool versus what it actually is. And you know it started,
20:00
you know, it started originally in Australia and in Europe and again to that
20:07
point of sale financing and for the traditional BNPL, I would say it's still
20:12
so new. You know, it's a zero to low interest product in which
20:17
you're able to make four payments over the course of six weeks to pay for
20:22
a product. So it's a great tool again bringing competition into the marketplace.
20:27
It allows people, you know, just an alternative payment if they need to
20:33
spread their payments again to meet their paychecks or whatever the case might be,
20:37
or to address it an emergency immediately, they can do it in a way
20:41
again that has the zero interest do it in a way that when they pay
20:45
it off in four weeks, they don't occur any other fees attached to it.
20:49
So it's a lower cost option that allows you to spread your payments over
20:53
forre So yesterday the New York Post or the New York Fed put out a
20:57
blog on their recent research, and you are starting to see, you know,
21:03
a lot of folks having and we saw it during the holidays and uptick
21:06
and kind of the use of by now pay later as we would define it
21:11
to pay in for zero to no interest products. And that's because just again,
21:15
people want alternatives in the marketplace to be able to use a product,
21:21
a payment product that fits their need. You know, back in the day,
21:23
I remember when credit cards started to get more adopted and the first time
21:29
I used it in a grocery store. My dad was appalled, you know,
21:32
He's just like, how come you're using a credit card? And I
21:34
was like, well, one, it's convenient too. I'm not incurring interests
21:38
because I was only paying paying what I could afford at the time. And
21:44
so I said, for me, it's just convenience and I'm not incurring any
21:48
other fees that I wouldn't any otherwise. And so you know, now it's
21:52
just ubiquitous and everybody's now you know, tapped to pays, you know,
21:55
with credit card or others, so you know that adoption. We're starting to
21:59
see similar to buy now prelator as an alternative payment that helps people budget and
22:03
finance their needs. Sure, and I'm not sure. I think my parents
22:07
do primarily use cards now, but they've been slow adopters in that way too,
22:12
where it was always a sense of why would you use a credit card
22:15
if you have the money, and there's a lot of reasons. And I
22:18
do see a lot of the credit card companies now offering the payover time feature,
22:22
which is kind of an embedded short term installment pay over four months instead
22:27
of having that a crew interest and hit your balance and have more of a
22:32
variable monthly payment. But of course then you have to qualify for that credit
22:34
card the first time, which I think a lot of there's probably a good
22:38
chunk of buy now, pay later frequent users who may not have qualified for
22:41
that yet. Yeah, and a lot of bany now prelator eighty five percent
22:45
use a debit card, so they do. There's an allergic or an allergy
22:49
I guess to credit in that sense. And you saw that shift after eight
22:55
where either they saw what their parents had gone through or others around them,
23:00
and so there is that more default into a debit account versus a credit card
23:04
use of credit cards, So that's a shift in consumer behavior as well.
23:10
Interesting. I can definitely see that, and I think the you know,
23:12
I know you and I talked before about BNPL and credit reporting, and we've
23:17
certainly talked about that at Upstart, as we use a lot of consumer credit
23:21
data as inputs to our underwriting model. I know some of the different companies
23:26
have taken different different taxs with do they report the first line? Do they
23:30
only report of it's negative? Does it have to be over a certain amount
23:33
of time? And it doesn't seem like there's a lot of kind of standardization
23:37
yet, and I think you could you could certainly argue that it may you
23:41
know, kind of hide the risk or obscure somebody's real DTI. Do you
23:45
think that's valid or do you think that's more of a kind of theoretical fear
23:49
of new products that people may not fully understand. What's unfortunate right now is
23:55
is it's hard for credit viureaus to capture the positive aspect of somebody that uses
24:03
bind now pay later in a responsible manner, in a way in which they're
24:07
paying it off each cycle or you know, each four week period and doing
24:11
it, you know, repeatedly, and not being able to build positive credit
24:15
because right now it happens if you take out one, two or three different
24:21
BNPL loans or use BNPL products, you're maxing out your amount of available credit,
24:26
which could seem as a negative. And so until we solve some of
24:30
those issues within just they weren't the credit vearas weren't built to capture daily transactional
24:38
information, two week transactional information. They were more capturing or still try to
24:44
capture, you know, those large larger payments, monthly payments that you do
24:48
for home and utility car and other aspects of it. So that ability,
24:55
I think there's a hesitancy until you can fix that issue and for them to
25:00
be able to really understand a the frequency, the amount, the regular cadence,
25:06
that it's not maxing out a credit in a negative way, but yet
25:08
in four weeks you can show somebody you know with a responsible repayment and that
25:12
should be seen as a good credit indicator. Those are some of the hesitancy
25:18
that you have in the marketplace. And then with only three bureaus, there
25:22
is not harmonization across each and so viewing each of this data in a very
25:26
different way is something that is just too comferssome for the companies to report into
25:33
because it will be translated differently depending on the company in which they're engaged with.
25:37
So just a little bit of the word. I think the bin Now
25:41
failure industry is ahead of the market as far as on the credit reporting side.
25:48
But it's something that you know, our own companies work with very bin
25:52
now pailaor work with the consumers and there's protections built into them, you know,
25:56
you pause, you know, if someone is laid on a payment,
25:59
they are from using that product again until that is satisfied, so they are
26:03
in their own underwriting, they're trying to mitigate that risk as well and not
26:07
put somebody in over extension. And these are often I think the average right
26:12
now use of a VNPL product is like one hundred and forty seven dollars,
26:17
so it's a very low It's a much different product than like I say,
26:22
a mortgage or a car, or purchasing a large purchase. These are very
26:26
very small oftentimes are very small purchases that are used on a frequent basis.
26:32
Sure, and I do think a little bit of the just novel mess of
26:34
them is in the unknown around that, because it certain people can certainly get
26:38
themselves into a significant amount of trouble quickly with credit cards, and the fees
26:44
and the interest can build up to a place where they can't support those payments.
26:48
I know all of the credit bureaus have built various kind of features and
26:51
products to think about kind of those off tradeline payments like utilities and cell phone
26:56
bills and rent, and how do you give people kind of credit for those
27:00
sorts of activities to help kind of build their credit profile and have a more
27:04
visible risk footprint. I think one of the other newer products. It's getting
27:08
a lot of attention and all of our listeners may not be as familiar with
27:11
it is earned wage access, which you had mentioned earlier. Can you talk
27:15
a little bit about just what that is, what that means, and what
27:18
are some of the solutions you're seeing out there. Yeah, and I would
27:22
say it's kind of broken down to what you defined it as in the sense
27:26
of it's earned wage access, and so it's access to your already earned wage.
27:32
As we know, often times here in the United States, we are
27:36
paid either every two weeks or once a month. And to your earlier point
27:41
in the conversation about there are times when people need liquidity, they need access
27:45
to funds prior to a two week pay period for a variety of reasons,
27:51
or they would just like you know, we do have a lot of folks
27:55
that use earned wage access as a budgeting tool. They know, you know,
27:59
if they get it funds on a more steady basis, they know exactly
28:03
what they have to spend. So there's a variety of reasons, but essentially
28:07
it's to help tide over in between work periods. It's based on what you've
28:11
already earned, so when you go to work on a daily basis. You
28:15
know, back in the day, it would be like can I get a
28:18
Can I get it? Maybe a cash advance, and it was you know,
28:21
money taken out of the till at the end of the night and you
28:23
know, given to you and with the promise of being paid back. It's
28:27
kind of in that same vein now obviously in a digital manner, and so
28:33
it's allowing people to have access to the wages on a daily basis or on
28:38
a depending on their frequency, on a regular basis based off of kind of
28:42
what you've already earned. So that's what these that's the innovation that is happening.
28:47
There's two different i would say ways in which to in which it clows.
28:52
One is employer based, so you work at many companies are working directly
28:56
with an employer and it's an added benefit that they buy to employees. And
29:00
then the other is direct to consumer, where you have companies in this space
29:06
that those that don't have employers, such as you know, the United States
29:11
House a representative only pays once a month and so there's we have a couple
29:15
hundred house members or house staffers that use the product that obviously the employer does
29:22
not pay, so you have you know, employers or employees that perhaps are
29:26
gig workers ten ninety nine or their employer is not engaged in an earthen wage
29:32
program that allows them again to be able to have access to their wages sooner
29:37
than their pay period. Sure. Yeah, and I think that can be
29:41
certainly meaningful to you. You know, from the products that you're seeing out
29:44
there, are you seeing where people are kind of generally using those on a
29:48
regular basis. Is it they like to have the safety and security of getting
29:52
advanced access if needed, or is it kind of a mix of behaviors as
29:56
those are getting more popular. Yeah, it's really a mix of be behavior.
30:00
It depends on kind of what the needs of the person is. Some
30:06
that you know, like I said, want to use it as a budgeting
30:08
tool so they know, you know, exactly how much they have to spend,
30:11
either on a daily basis or on a more frequent basis. Some that
30:17
need a car to work, car breaks down, they need access to a
30:21
load cost, low fee, no fee product because right now altron it is
30:26
in the marketplace. Are one that do have high interest based on you know,
30:30
trying to trap you into you know, they make money when your behavior,
30:36
you know, when you aren't able to make a payment, when you
30:37
aren't able to satisfy an obligation, that's how they make money. So they
30:42
want to push you into a risky behavior, which you know help them.
30:48
Whereas these products are, you know, there's no recourse, there's no interest,
30:52
there's no fees attached. There is an aspect of them that you know
30:56
allows you to have access to your earned wage on more free basis. So
31:00
mixed use on kind of why and how people use it. Great? Great,
31:06
Well, I think one really last question that I think I'd like to
31:10
get your thoughts on. You know, we've talked certainly about some of the
31:12
new products and some of the risks out there, but really like, how
31:15
do you think about these either novel or emerging financial products, Like in what
31:21
ways can they be a positive impact to consumer credit reports and not just their
31:25
credit report but really just their overall financial health and wellness. Yeah, I
31:29
mean, eventually you would want to be able to have this data available,
31:33
the frequency of use, those that are repaying their obligations on a steady and
31:38
regular basis, you know, just that they're showing and demonstrating responsible behavior that
31:45
should be rewarded either on a higher credit score or allow them to have to
31:49
your point, you know, to have them to have access to more capital,
31:55
to you know, if they want to start a small business, if
31:56
they want to you know, use it for a variety of different matters and
32:01
means. So I think the positive aspect is that there are loafe, low
32:07
cost, affordable products that are now coming into the marketplace that allow consumers and
32:13
small businesses to have access to this affordable capital, to be able to one
32:19
live at healthier life, to meet the needs of themselves and their family.
32:22
Three, be able to start incredible businesses without having to go into so much
32:28
debt, but to be able to really strive in this economy. Sure,
32:31
and I'm excited to see over the next kind of five to ten years where
32:36
things had I think, you know, we're certainly seeing that the states aren't
32:38
quite sure where they should regulate where the federal legislation which agencies are in charge
32:45
of wide and I think it'll be some It's great to have organizations like the
32:49
FTA out there kind of leading the charge and working through these issues. But
32:53
thank you very much, appreciate the conversation. Glad to have you on the
32:57
podcast and just thanks for your time today. Thanks Lind so much for having
33:00
me. Upstart partners with banks and credit unions to grow households and expand consumer
33:06
lending. Through its leading AI lending platform. Upstart powered banks and credit unions
33:10
leverage AI to offer higher approval rates and experience lower loss rates while simultaneously delivering
33:16
the exceptional digital first lending experience that consumers demand. Whether you're looking to grow
33:22
and enhance your existing personal and auto lending programs or you're just getting started,
33:27
Upstart can help. Upstart offers an end to end solution that can help you
33:30
find more credit worthy borrowers within your risk profile with all digital underwriting, verification,
33:37
loan closing, and servicing. It's all possible with Upstart in your corner.
33:42
Learn more about finding new borrowers, enhancing your credit decisioning process, and
33:45
growing your business by visiting upstart dot com slash lenders. That's upstart dot com slash lenders