Fintech Upgrade applies for ILC charter

Upgrade, a major player in the consumer credit and Buy Now, Pay Later (BNPL) space, is officially applying for a bank charter in Nevada. Currently, fintechs like Upgrade have to partner with traditional banks to issue loans and credit cards. By becoming an Industrial Loan Company (ILC), Upgrade will be able to lend its own money directly. For retailers and merchants using Upgrade’s financing products, this is a signal of long-term stability. It means the lender is looking to lower its own costs, which often translates to more competitive rates or more robust approval algorithms for your customers. This move follows a trend of successful fintechs trying to cut out the middleman. By owning the bank, Upgrade gains more control over its lending criteria and product design. They have already hired veteran banking regulators to lead the new entity, signaling they are serious about compliance. While the application process is long and difficult, a successful charter would make Upgrade a more formidable competitor against traditional big banks. For your business, this likely means a more integrated and reliable financing partner that isn't at the mercy of a third-party bank's shifting risk appetite.

Source: Banking Dive

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