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 struck a deal to acquire corporate card startup Brex, marking two significant moves in a fintech sector increasingly blurring the lines between traditional banking and technology platforms.

The developments, disclosed in early February 2026, signal a broader shift as fintech companies pursue direct banking licenses while established banks snap up once-independent startups that promised to disrupt them. For finance chiefs navigating vendor relationships and payment infrastructure, the consolidation raises questions about which fintech partnerships will remain independent and which will fold into traditional financial institutions.

Affirm's pursuit of an ILC charter—a specialized banking license that allows companies to take deposits and make loans while avoiding full bank holding company regulation—would give the point-of-sale lender direct access to cheaper funding and greater control over its lending operations. The company, known for its installment payment options at checkout, has historically relied on bank partnerships and securitization markets to fund its loan book. An ILC charter would allow Affirm to gather deposits directly, potentially reducing its cost of capital and dependence on wholesale funding markets.

The timing is notable. ILC charters have drawn scrutiny from banking regulators wary of allowing commercial companies into deposit-taking without full Federal Reserve oversight. Previous ILC applications from fintech companies have faced lengthy review periods and, in some cases, withdrawal. Affirm's application will test whether the current regulatory environment has warmed to fintech-bank convergence or whether the company faces a protracted approval battle.

Meanwhile, Capital One's move to acquire Brex represents a different calculus. The credit card giant, which has spent years building its own digital banking capabilities, is now buying a startup that raised hundreds of millions in venture capital with the explicit goal of replacing traditional corporate cards. Brex, founded in 2017, built its reputation offering corporate cards to startups without requiring personal guarantees—a pitch that resonated with venture-backed companies but required Brex to underwrite based on cash balances and fundraising rather than traditional credit metrics.

The acquisition suggests Capital One sees value in Brex's technology platform and customer base, particularly among high-growth companies that might eventually mature into larger corporate banking clients. For Brex, the deal provides an exit after a period of fintech retrenchment and questions about the unit economics of serving early-stage startups with thin margins on card interchange.

The podcast discussion that surfaced these deals also touched on proposed credit card interest rate caps and the Credit Card Competition Act, with hosts Jason Mikula and Alex Johnson questioning whether these legislative proposals serve as genuine policy initiatives or bargaining chips in broader financial regulation debates. A 10% cap on credit card interest rates, if enacted, would fundamentally reshape consumer lending economics, but its viability remains uncertain.

The fintech sector's evolution from disruptor to consolidation target reflects a maturation cycle familiar to finance chiefs who watched similar patterns in enterprise software. The question now is whether the next wave of fintech innovation comes from independent startups or from within the balance sheets of Capital One and its peers.