Fintech Avant applies for OCC charter

Avant, a major player in the mid-prime consumer lending and credit card space, is moving to become a full-fledged bank. By applying for a national bank charter through the OCC, the company is signaling a major shift in how it funds the loans your customers use. Currently, fintechs like Avant often rely on third-party banks to originate loans. By cutting out the middleman, Avant aims to lower its own cost of capital. For retailers and operators, this is a positive signal for long-term stability. A national charter would allow Avant to offer more competitive rates and a wider variety of credit products across all 50 states without navigating a patchwork of state-by-state regulations. This move is particularly important for merchants serving 'middle-income' customers—those who might not qualify for Tier 1 prime financing but have steady income. If successful, Avant could become a more aggressive competitor in the point-of-sale space, potentially offering higher approval limits or lower interest rates due to their reduced overhead. This reflects a broader trend of fintech lenders seeking 'bank status' to ensure they can continue lending even when the economy gets bumpy.

Source: Banking Dive

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