Upgrade says the application would give the fintech its own FDIC-insured bank while preserving its existing relationships with partner banks and loan purchasers.
The neobank says it has provided more than $53 billion in credit to 8.5 million customers since its 2016 founding. The firm said the ILC charter would allow the company to better fund credit products.
Unlike traditional bank holding companies, the parent companies of ILCs are exempt from the Bank Holding Company Act, provided they technically abstain from offering nominally demand deposit accounts.
ILCs, unlike national trust companies, are FDIC-insured, and therefore pay assessment fees to support the Deposit Insurance Fund.