Avant Applies for National Bank Charter to Serve Customers
Fintech lender Avant has applied for a national bank charter, aiming to reduce costs and offer integrated banking products directly to middle-income
Fintech company Avant has filed an application for a national bank charter with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. The move, announced in a company release, aims to let Avant serve customers directly and expand access to credit through an integrated digital banking platform.
Avant uses data and machine learning to provide credit cards, personal loans, and a personal financial management tool. The proposed charter would allow the company to offer these banking products and financial health tools under a single regulatory framework.
Leadership's Vision for Expansion
Avant Co-Founder and CEO Al Goldstein stated the company has focused on serving over 100 million Americans he says are overlooked by the traditional financial system since its 2012 founding. "A national bank charter would further our mission, help reduce our cost of funds and enable us to offer products under one regulatory framework," Goldstein said in the release.
If regulators approve the application, Avant Chief Business Officer Charles Whittaker would become the CEO of the newly formed Avant Bank, N.A. Whittaker emphasized the company's long-term goal. "For more than a decade, we’ve worked to give middle-income Americans a fairer shot at credit than their credit score alone would suggest," he said. A charter would allow the firm to build and service products end-to-end to create more value for customers.
A Trend in Fintech Charter Applications
The application fits a broader trend of financial services firms seeking bank charters. According to a previous PYMNTS report from August 26, the OCC made nine significant charter determinations in the 90 days ending August 24. Those decisions included six preliminary conditional approvals, one final approval, and two denials.
Another report from September 10 noted that FinTech and digital asset companies are increasingly pursuing regulated institutions with different powers to integrate into their existing operations.
Avant's Recent Financing Activity
The company has a history of securing significant financing for its lending operations. In February, Avant announced it closed a $200 million personal loan securitization. The company said that transaction would provide over $500 million in financing capacity over a 24-month period. Avant identified it as its 23rd personal loan securitization since 2012 and its seventh revolving transaction.
The national bank charter application represents a strategic step for Avant to control more of its product lifecycle and potentially lower operating costs.
