When my startup, Figure, recently withdrew our OCC bank application, many in the media took it as a sign that fintechs like us need to become a bank to survive—but that the process is simply too hard. They got it wrong. Figure didn’t withdraw its application because it couldn’t become a bank, we did it because we no longer have interest in being one. And I don’t think we are alone.
There are many compelling reasons for a fintech to become a bank, starting with the simplicity this would provide when it comes to licensing. Today, Figure has over 200 state licenses for lending, servicing, and money transmission. If we were a bank, we’d operate as a state or national bank, and export that banking license to all of the states we do business in. Having one regulator has the potential to generate significant operational and compliance savings, while ensuring a consistent product offering to all customers.
