Upgrade, the San Francisco fintech that offers BNPL, credit cards and personal loans, applied to Nevada regulators and the FDIC for an industrial loan company charter to form Upgrade Bank. Upgrade’s loans are issued today by partner banks Cross River and Celtic, and the company says its own bank would add another way to fund its credit products while those partnerships and its loan-buyer deals continue. An industrial loan charter gives a nonbank parent its own FDIC-insured lender while keeping the parent out of Federal Reserve holding-company oversight, the same route Affirm took when it applied in Nevada earlier this year. Virginia Varela, Upgrade’s head of banking strategy and the former CEO of Golden Pacific Bank, would run the bank if regulators approve it.
