Affirm Seeks Banking Charter as Capital One Moves to Acquire Brex in Fintech Shakeup

Affirm Seeks Banking Charter as Capital One Moves to Acquire Brex in Fintech Shakeup

Buy-now-pay-later lender Affirm has applied for an industrial loan company charter while Capital One announced a deal to acquire corporate card startup Brex, marking the latest consolidation moves in a fintech sector increasingly seeking traditional banking powers and exits.

The dual developments, discussed in the February 2026 edition of the Fintech Recap podcast by Jason Mikula and Alex Johnson, signal a maturation of the fintech industry as growth-stage companies either pursue their own banking licenses or sell to established financial institutions with existing regulatory infrastructure.

Affirm's pursuit of an ILC charter—a specialized banking license that allows companies to take deposits and make loans while avoiding some bank holding company restrictions—represents a strategic shift for the point-of-sale financing provider. The charter application comes as fintech lenders face pressure to diversify funding sources beyond securitization markets and warehouse lines. An ILC would give Affirm direct access to deposit funding, potentially lowering its cost of capital and reducing reliance on third-party bank partnerships that have proven fragile when regulators tighten oversight.

The Capital One-Brex transaction, meanwhile, continues the trend of traditional banks acquiring fintech upstarts rather than building competitive products in-house. Brex, which launched in 2017 targeting startups with corporate cards that didn't require personal guarantees, pivoted in recent years toward broader expense management software as the venture-backed customer base contracted. The acquisition gives Capital One an established platform in the corporate spend management space, where it has historically lagged behind American Express and newer entrants.

For CFOs, the Affirm charter application raises questions about the competitive landscape in embedded finance. If approved, Affirm would join a small club of fintech companies—including SoFi and Varo—that have secured full banking charters or ILC licenses, potentially reshaping how consumer credit is distributed at checkout. The regulatory approval process typically takes 12-18 months and faces heightened scrutiny following the 2023 banking crisis that exposed weaknesses in fintech-bank partnerships.

The podcast episode also touched on legislative proposals including a potential 10% cap on credit card interest rates and the re-emergence of the Credit Card Competition Act, which Mikula and Johnson suggested may serve as "bargaining chips" in broader financial services negotiations rather than serious policy initiatives. Additionally, the hosts discussed Coinbase CEO Brian Armstrong's shifting stance on crypto market structure legislation, though specific details of that discussion were not elaborated in the source material.

The timing of both announcements reflects broader uncertainty in fintech business models. Companies that raised capital at elevated valuations during the 2020-2021 boom now face pressure to demonstrate paths to profitability or find exits. Banking charters offer one route to sustainable unit economics through deposit funding; acquisition by a regulated bank offers another through immediate access to compliance infrastructure and distribution.

What remains unclear is whether regulators will continue approving fintech charter applications at the same pace, particularly as the Federal Reserve and OCC reassess their approach to novel bank structures. The Affirm application will serve as a test case for whether post-SVB regulatory caution extends to ILC charters, which have historically faced less stringent oversight than full national bank charters.