Upgrade Sought Industrial Loan Company Charter
The fintech firm applied for a Nevada-chartered, FDIC-insured status to expand its credit funding capabilities.
Updated on Oct. 12, 2026 in Financial Services
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Upgrade has applied for an Industrial Loan Company charter from the Federal Deposit Insurance Corp. and the Nevada Financial Institutions Division. If approved, the firm would operate as a Nevada-chartered, FDIC-insured subsidiary of Upgrade, Inc.
Why it matters
The charter would allow the company to better fund its credit products while maintaining existing relationships with partner banks and loan purchasers. Industrial Loan Companies are regulated by the FDIC and are exempt from the Bank Holding Company Act provided they do not offer demand deposit accounts.
Since its founding in 2016, Upgrade has provided more than $53 billion in credit to 8.5 million customers. The Federal Deposit Insurance Corp. has approved nearly two dozen national trust charters since 2025.
The players
Upgrade, Inc.
This San Francisco-based financial technology company provides credit products and consumer financial services.
Federal Deposit Insurance Corp.
This independent federal agency provides deposit insurance to depositors in United States banks and regulates financial institutions.
Nevada Financial Institutions Division
This state regulatory body oversees the licensing and supervision of financial entities operating within Nevada.
The details
The proposed structure involves establishing a wholly owned subsidiary with independent governance and internal controls. This application follows a series of charter requests in the sector, including recent approvals for companies like Edward Jones, Stellantis, General Motors, and Ford.
Timeline
Upgrade was founded in 2016.
Nissan applied for an ILC charter in June 2025.
The FDIC withdrew a proposed rule requiring ILC applicant independence in July 2025.
Edward Jones received ILC charter approval in February 2026.
Flex Rent applied for an ILC charter in July 2026.
Market Landscape
This application follows a broader industry trend where non-bank financial firms seek ILC charters to gain regulatory benefits under the Bank Holding Company Act. These companies compete for charters alongside major automotive and financial brands that have successfully secured similar statuses to streamline their lending operations.
Customers of the company may experience changes in how credit products are funded and managed if the charter is granted. This operational shift primarily affects the backend of the firm's lending business rather than direct consumer-facing interfaces or current account terms.
The takeaway
Companies in the fintech sector are increasingly pursuing bank-like charters to stabilize their lending capital and operational structures. This strategy reflects a growing effort by digital lenders to integrate more deeply into the traditional regulatory framework of the U.S. banking system.
Further reading
Learn more about the evolving landscape of Financial Services.
Source note: This article includes information reported by American Banker.
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