Capital One to Acquire Brex as Affirm Pursues Banking Charter in Fintech Consolidation Wave

Capital One to Acquire Brex as Affirm Pursues Banking Charter in Fintech Consolidation Wave

Capital One has struck a deal to acquire Brex, the corporate card and expense management startup, according to a fintech industry podcast released this week, marking the latest move in a consolidation trend reshaping how traditional banks compete with venture-backed financial technology firms.

The acquisition, discussed on the February 4th episode of Fintech Recap, comes as Affirm—the buy-now-pay-later lender—has applied for an Industrial Loan Company (ILC) charter, signaling a push by fintech companies to either become regulated banks themselves or get absorbed by existing ones. For CFOs watching the competitive landscape in corporate spend management and embedded finance, the moves suggest the experimental phase of fintech is giving way to a more consolidated, regulated structure.

The Capital One-Brex deal is particularly notable because it pairs a traditional credit card issuer with a company that built its brand on disrupting corporate cards. Brex, founded in 2017, targeted startups and tech companies with corporate cards that didn't require personal guarantees—a pitch that resonated during the venture capital boom but faced headwinds as the funding environment tightened. Capital One gains a modern expense management platform and a customer base of growth companies, while Brex gets the balance sheet and regulatory infrastructure of a major bank.

Affirm's ILC application represents a different path: becoming the bank rather than selling to one. An ILC charter would allow Affirm to take deposits and make loans directly, rather than relying on bank partnerships that have proven fragile for fintech companies. The charter type—used by companies like Nelnet and Toyota Financial—offers banking powers without the full regulatory burden of a commercial bank charter, though it still requires Federal Deposit Insurance Corporation approval and state-level oversight.

The podcast, hosted by Jason Mikula of Fintech Business Weekly and Alex Johnson of Fintech Takes, also covered brewing legislative battles that could reshape the credit card industry. Proposals for a 10% interest rate cap on credit cards and the re-emergence of the Credit Card Competition Act were discussed as potential "bargaining chips" in broader financial services negotiations—the kind of regulatory uncertainty that makes CFOs nervous about long-term vendor relationships.

Perhaps most revealing was the hosts' discussion of Coinbase CEO Brian Armstrong's stance on crypto market structure legislation, described in the episode as a "rug pull"—industry slang for abandoning a promised position. The comment suggests tensions between crypto companies' public advocacy for regulatory clarity and their private preferences for operating in gray areas, a dynamic that continues to complicate treasury decisions around digital assets.

The episode also touched on HBO's drama "Industry," which apparently depicts banking and fintech scenarios that "get dark"—though the hosts warned of spoilers. For an industry podcast to spend time on a prestige TV show's portrayal of finance suggests either that the show is getting the details right, or that fintech insiders are hungry for any cultural representation beyond "tech bro disrupts banking" clichés.

What CFOs should watch: whether Affirm's ILC application succeeds (the FDIC has been skeptical of fintech charters), what Capital One pays for Brex (terms weren't disclosed in the podcast), and whether other corporate card startups like Ramp face similar pressure to sell or seek charters. The era of "we're a fintech, not a bank" appears to be ending. The question now is whether companies become banks or get bought by them.