Will An OCC Charter Reshape Avant's Cost of Capital?

Avant applied to the Office of the Comptroller of the Currency for a bank charter, signaling a shift toward federal supervision and deposit funding. A national charter would allow rate exportation across states and subject the company to OCC and, if it takes deposits, FDIC oversight. The move follows examples from SoFi in 2022, LendingClub in 2021, and Varo in 2020, which pursued bank status to stabilize funding and expand products. A charter would add compliance requirements under the Bank Secrecy Act and Community Reinvestment Act and increase governance and examination obligations. Regulators have tightened third-party risk guidance, affecting sponsor-bank models with partners such as WebBank, Cross River Bank, Celtic Bank, and Stride Bank. Approval timelines vary, and the outcome will influence how other mid-sized fintech lenders evaluate charters versus partnerships.

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