By Business Desk | September 23, 2026
In a move that signals a significant maturation of the fintech sector, Chicago-based online lending platform Avant has officially filed an application with the Office of the Comptroller of the Currency (OCC) to establish a de novo national bank. The move, announced Friday, aims to transition the long-standing fintech into a fully regulated financial institution, a strategic pivot that leadership believes will lower capital costs, unify regulatory oversight, and broaden the company’s product ecosystem for the "overlooked" middle-income American consumer.
The Strategic Pivot: Why Avant is Going "Bank"
Since its inception in 2013, Avant has operated as a non-bank financial institution, utilizing proprietary machine learning algorithms—branded as "CreditOS"—to underwrite loans and credit cards for individuals often bypassed by traditional banks. By filing for a national charter, Avant is seeking to join a growing cohort of technology-first firms that are shedding their third-party partnership models in favor of becoming the primary financial institution for their customers.
According to Avant co-founder and CEO Al Goldstein, the transition is the logical culmination of over thirteen years of data gathering. "We’ve spent more than thirteen years developing a data-driven approach to credit that serves this population at scale," Goldstein stated. "A national bank charter would further our mission, help reduce our cost of funds, and enable us to offer products under one regulatory framework."
The "cost of funds" is the central economic driver here. Currently, fintechs must rely on partnerships with existing banks or capital markets to fund their loan originations, which often involves paying premium interest rates to institutional lenders. By securing a charter, Avant would gain direct access to consumer deposits—the cheapest form of capital available—thereby allowing them to lower interest rates for borrowers and potentially increase loan approval volume.
A Chronology of Growth and Regulatory Ambition
The path to this application did not happen overnight. Avant’s trajectory reflects the broader evolution of the fintech industry over the last decade and a half.
- 2013: Avant launches in Chicago with a focus on unsecured personal loans for the "near-prime" market—consumers who have a credit history but are often ignored by major retail banks.
- 2015–2018: The company scales aggressively, processing billions in credit and refining its CreditOS platform. During this period, the industry sees a boom in "marketplace lending."
- 2020–2023: Recognizing the limitations of relying solely on external partners, Avant begins to pivot toward a more integrated model, introducing credit card products and building a "financial home" for its users.
- 2025: A pivotal year for the industry as the OCC accelerates its review of fintech bank charters, setting the stage for Avant’s formal application process.
- September 2026: Avant officially submits its de novo charter application to the OCC, signaling its readiness to move from a fintech partner to a federally regulated bank.
Supporting Data: The Credit Gap in America
Avant’s business model is built on a specific, stubborn problem in the U.S. economy: the "credit middle." According to recent data from the Federal Reserve, roughly one-third of U.S. adults applied for credit last year, and nearly one-third of those applicants were either outright denied or received significantly less credit than they requested.
This gap exists largely because traditional credit bureau metrics—FICO scores—often fail to capture the full financial health of an individual, particularly those with "thin" files or non-traditional income streams. Avant’s CreditOS platform utilizes alternative data points to determine creditworthiness. By moving to a bank charter, the company intends to scale this proprietary underwriting model, effectively turning its machine learning insights into a competitive advantage that traditional banks, constrained by legacy systems, struggle to replicate.
The impact of this approach is already measurable: Avant has facilitated over $17 billion in credit to date. However, the company argues that without a charter, it is limited by the "operational overhead" of managing complex, state-by-state regulatory requirements.
Official Perspectives and Industry Implications
The application is not merely a business move; it is a regulatory milestone. Michele Alt, co-founder of the Klaros Group—a firm that consulted with Avant on its application—noted that the move is emblematic of the "next phase" of the digital lending revolution.
"Avant has already facilitated over $17 billion in credit to those who are overlooked by the legacy financial system," Alt told Banking Dive. "The bank will build on Avant’s successful model to give these consumers access to affordable credit products and financial tools designed to help them move their financial lives forward."
However, the road ahead is rigorous. The OCC maintains high standards for de novo applicants, emphasizing capital adequacy, risk management, and cybersecurity. Since January 2025, the OCC has received 42 applications for de novo charters. Of those, only 27 have been approved, with two denied and one returned. The remaining 12 applications for national trust charters and 15 for full bank charters (including those of notable players like Mercury and Nubank) highlight the competitive nature of the current landscape.
Implications: The Future of the "One-Stop-Shop"
Should the OCC approve the application, the implications for Avant and its customers are profound:
- Uniform Regulatory Compliance: Operating under one national framework removes the burden of managing disparate state-level banking regulations. This allows for a "plug-and-play" deployment of new products across all 50 states.
- Product Diversification: Beyond just loans and credit cards, a national bank charter allows Avant to offer a full suite of banking products, including checking and savings accounts, which are essential to becoming a customer’s "core financial partner."
- Cost Savings for Consumers: Goldstein has been vocal about the company’s intent to pass cost-of-capital savings back to the consumer. "Reducing operational overhead and the cost of facilitating access to credit creates opportunities to pass those savings on to consumers," he noted.
The Competitive Landscape
Avant’s move puts it in direct competition with both traditional regional banks and other digital-native neo-banks. While neo-banks often rely on "banking-as-a-service" (BaaS) providers to handle the heavy lifting of regulation, Avant is choosing the path of self-sufficiency. This indicates a long-term belief that being a bank is the only way to achieve sustainable profitability in the high-stakes world of consumer credit.
Looking Ahead: The Regulatory Review Process
The next several months will be defined by the "waiting game." The OCC will perform a deep dive into Avant’s capital structure, its governance, and its technological robustness. Regulators will be particularly interested in how the company’s CreditOS model performs during a potential economic downturn, as the stability of the model is paramount for an entity holding federally insured deposits.
For the middle-income American, the potential arrival of "Avant Bank" could signify more than just another credit card offer; it could represent the entry of a more efficient, technology-first competitor into the retail banking space. As the company waits for the green light from Washington, the broader fintech industry will be watching closely—not just to see if Avant succeeds, but to see if this model of "fintech-to-bank" conversion is the blueprint for the next decade of financial services.
As Goldstein put it, "Our goal has always been to offer our customers the most attractive financial solutions. A bank charter would help us to expand our products to more customers and help make those products more competitive." Whether that goal becomes a reality now lies in the hands of federal regulators.
