Introduction
The line between fintech companies and banks is dissolving. Charter applications to the OCC surged in 2025 to a level not seen since 2008, and in August 2026 Comptroller Jonathan Gould reported 40 bank charter applications in roughly 18 months, 23 of them involving digital asset activity. Fintechs are seeking bank charters to access insured deposits (lower cost of funds), originate loans directly (eliminating partner bank dependency), and gain independent regulatory standing. Simultaneously, traditional banks are acquiring fintech capabilities and building digital platforms. The result is convergence: fintechs are becoming banks, and banks are becoming technology companies.
For FIG bankers, convergence is one of the most active advisory themes: charter application strategy, bank acquisition M&A (fintechs buying small banks for their charters), regulatory compliance structuring, and the valuation transition from fintech metrics (EV/Revenue) to traditional bank metrics (P/TBV, P/E) as fintechs mature into regulated depository institutions.
The Charter Pathways
Fintechs seeking to become banks have several pathways, each with different regulatory implications:
De novo national bank charter (OCC): applying to the OCC for a new national bank charter. This is the most comprehensive pathway, subjecting the fintech to full OCC supervision, CRA compliance, and (if the parent is a bank holding company) Federal Reserve oversight. SoFi initially filed for a de novo charter before pivoting to an acquisition.
Bank acquisition: purchasing an existing chartered bank to obtain its banking license. SoFi acquired Golden Pacific Bancorp. LendingClub acquired Radius Bancorp. SmartBiz Loans acquired CenTrust Bank (OCC conditionally approved March 2025). This pathway is faster than de novo chartering but requires finding a willing seller and navigating the change-of-control approval process.
Industrial Loan Company (ILC) charter: ILCs are state-chartered depository institutions (primarily in Utah, Nevada, and a few other states) that allow access to FDIC-insured deposits and direct lending authority without subjecting the parent company to Federal Reserve bank holding company supervision. This feature makes ILCs attractive to technology companies that want bank-grade funding economics without the full regulatory burden of a bank holding company structure.
Trust company or limited-purpose charter: a narrower state or national charter that allows specific activities (custody, payments, trust services) without full banking authority. Digital asset firms have embraced this pathway: in December 2025 the OCC conditionally approved five national trust bank charters, de novo charters for Circle's First National Digital Currency Bank and Ripple National Trust Bank plus conversions of BitGo, Fidelity Digital Assets and Paxos from state trust companies.
- Industrial Loan Company (ILC)
A type of financial institution chartered under state law (primarily Utah and Nevada) that can accept FDIC-insured deposits and make loans, but whose parent company is not classified as a bank holding company under the Bank Holding Company Act. This regulatory distinction is significant: the parent of an ILC is not subject to Federal Reserve supervision, capital requirements, or activity restrictions that apply to bank holding companies, although the FDIC imposes its own conditions, written agreements and parent capital and liquidity support commitments. ILCs were originally created to serve industrial workers, but they have become the charter of choice for commercial and technology companies seeking banking capabilities: BMW, Toyota, Block (Square Financial Services) and several other fintech companies operate through ILC charters, and in January 2026 the FDIC approved deposit insurance for Ford Credit Bank and GM Financial Bank as Utah industrial banks. For FIG analysts, ILCs matter because they represent a pathway for non-bank companies to access the core advantages of banking (insured deposits, direct lending, payment network membership) without the full regulatory framework that applies to traditional bank holding companies. The ILC exemption is politically contentious: consumer advocates and community banks argue it creates an uneven regulatory playing field, while ILC proponents argue it promotes innovation and competition.
The Fintechs That Became Banks
SoFi: acquired Golden Pacific Bancorp in 2022 to operate SoFi Bank, N.A. under a national bank charter. SoFi's third-quarter 2026 results showed deposits up $5.8 billion in the quarter to $51.3 billion, funding its personal loan, student loan refinancing, and mortgage origination businesses at a lower cost of capital than its pre-charter model (which relied on warehouse facilities and securitization). SoFi's charter transformed its economics from originate-to-distribute to balance-sheet lending.
LendingClub: acquired Radius Bancorp in 2021, becoming the first US marketplace lender to operate as a bank. LendingClub now uses deposits to fund a portion of its loan originations while continuing to sell loans to institutional buyers.
Varo: became the first consumer fintech to receive a de novo national bank charter in July 2020. Varo operates as a digital-only bank with full banking authority.
Nubank: Nu Holdings received conditional OCC approval in January 2026 to form Nubank, N.A., a de novo national bank, positioning the Latin American neobank to launch deposit accounts, credit cards, lending, and digital asset custody for American consumers once the FDIC and Federal Reserve also sign off.
The Regulatory Shift Enabling Convergence
The charter surge that began in 2025 was enabled by a shift in regulatory posture. New leadership at the OCC, FDIC, and Federal Reserve created greater receptivity to non-traditional charter applicants, particularly those with technology-driven business models. In May 2025 the OCC restored expedited review for bank mergers and rescinded its 2024 merger policy statement, easing the path for fintechs and crypto firms looking to acquire small OCC-chartered institutions. Federal banking agencies signaled openness to new banks with focused or digital-first business models.
This regulatory shift is driving fintechs to move core activities (payments, custody, lending, stablecoin issuance) inside the regulated banking perimeter rather than relying on third-party bank partnerships.
The convergence trend is global. Revolut received a restricted UK banking license in July 2024 after a three-year application process, launched its full UK bank in March 2026, and in September 2026 won OCC preliminary conditional approval for Revolut Bank US, National Association, a de novo national bank. In Europe, N26 has held a German banking license since 2016. The European regulatory framework offers different charter pathways: EU e-money licenses provide some banking-like capabilities (holding customer funds, payment services) without requiring a full banking charter, creating an intermediate step that does not exist in the US system. The parallel convergence across the US, Europe, and Latin America confirms that the fintech-to-bank evolution is a structural trend rather than a US-specific phenomenon.
The convergence of fintech and banking is the defining structural trend in FIG. The wave of charter applications since 2025 signals that the most ambitious fintechs are choosing to operate inside the regulated banking system rather than alongside it, transforming themselves from technology companies into technology-enabled banks. For FIG professionals, this convergence ensures that fintech expertise and traditional banking analysis are no longer separate skill sets but complementary dimensions of the same advisory practice.
