Affirm has announced that it has applied to the Nevada Financial Institutions Division and the Federal Deposit Insurance Corporation (FDIC) to set up Affirm Bank.
With the proposed Nevada-chartered industrial loan company, Affirm aims to continue its strategy to expand its operations while holding an FDIC-insured institution. Also, establishing Affirm Bank would help the company in scaling access to financial products, reaching more consumers across the US.
Expansion at scale
If Affirm receives its approval, the resulting proposed entity is set to operate as a wholly-owned, Nevada-chartered, FDIC-insured bank subsidiary of Affirm. Additionally, it would maintain its independent governance and internal controls.
By coming as a subsidiary of Affirm, the proposed business would further improve the company’s current business and bank partnership models, including by offering more flexibility and diversification, to support the advancement of responsible development in the financial services sector. At the same time, the approval would mean that Affirm could benefit from more opportunities to roll out new products and services over time.
Talking about the strategic move, Max Levchin, Founder and CEO of Affirm, underlined that a banking subsidiary would solidify and diversify the company’s platform, and support it in bringing additional solutions to the market. He added that the decision focuses on expanding what Affirm can do for consumers and merchants, and developing for the long term.
Applying to establish the industrial loan company follows a string of collaborations that Affirm entered into and several product launches. Most recently, the BNPL company announced plans to launch its instalment loans to renters, in partnership with Esusu, aiming to bring a flexible option for managing one of the largest monthly expenses of individuals. Not long before this, just at the beginning of the year, Gr4vy and Affirm teamed up to provide transparent payment options to eligible clients across online and mobile checkout.
With these recent developments, as well as through its decision to apply to create Affirm Bank, the company seeks to further solidify its position in the industry while also improving its offering for its customers.
