Consumer complaint received 2022-07-13
Company: Upstart Holdings, Inc.
State: CA
Product: Payday loan, title loan, or personal loan
Sub-product: Personal line of credit
Issue: Charged fees or interest you didn't expect

Complaint:
I was approved for a loan with the company Upstart. 
Upstart advertises quick loans with their " advanced AI technology. '' Upstart has given me a loan with an interest at 23 %. 
For a {$220.00} payment, only {$86.00} goes to the principal and the other {$130.00} goes to Interest. 
This is about 70 % of my monthly payments going toward interest. 
Add on an annual interest rate and I'll basically be stuck in a loan for many years to come. 

Loan companies like XXXX, XXXX, XXXX, do these scams quite often. 
XXXX was sued by the Consumer Financial Protection Bureau in XXXX due to their targeting of low-income earners, minorities, and elderly people. This loan company also targets those that are vulnerable and approving them of loans like mines that has an Annual Interest rate and a hidden Variable Interest rate. 

Upstart 's interest fees violates the following California Constitution : ARTICLE XV USURY [ SECTION 1- SECTION 1. ] ( Article 15 added XX/XX/XXXX by Prop. 14, clause 35. Res.Ch. 5, XXXX. ) SECTION 1. 
The rate of interest upon the loan or forbearance of any money, goods, or things in action, or on accounts after demand, shall be 7 percent per annum but it shall be competent for the parties to any loan or forbearance of any money, goods or things in action to contract in writing for a rate of interest : ( 1 ) For any loan or forbearance of any money, goods, or things in action, if the money, goods, or things in action are for use primarily for personal, family, or household purposes, at a rate not exceeding 10 percent per annum ; provided, however, that any loan or forbearance of any money, goods or things in action the proceeds of which are used primarily for the purchase, construction or improvement of real property shall not be deemed to be a use primarily for personal, family or household purposes ; or ( 2 ) For any loan or forbearance of any money, goods, or things in action for any use other than specified in paragraph ( 1 ), at a rate not exceeding the higher of ( a ) 10 percent per annum or ( b ) 5 percent per annum plus the rate prevailing on the XXXX XXXX of the month preceding the earlier of ( i ) the date of execution of the contract to make the loan or forbearance, or ( ii ) the date of making the loan or forbearance established by the Federal Reserve Bank of XXXX XXXX on advances to member banks under Sections 13 and 13a of the Federal Reserve Act as now in effect or hereafter from time to time amended ( or if there is no such single determinable rate of advances, the closest counterpart of such rate as shall be designated by the Superintendent of Banks of the State of California unless some other person or agency is delegated such authority by the Legislature ). 

**No person, association, copartnership or corporation shall by charging any fee, bonus, commission, discount or other compensation receive from a borrower more than the interest authorized by this section upon any loan or forbearance of any money, goods or things in action. **

Company response to consumer: Closed with explanation