Flexible Finance wants to stop renting a bank charter and start owning one. On July 24, the company behind Flex Rent filed applications with the FDIC and Utah Department of Financial Institutions to charter Flex Bank, a Utah industrial bank that would issue Flex’s credit products directly instead of through a third-party sponsor.
The asset behind the filing: $40 billion in rent processed since 2019 across 3.2 million renters. That’s the book Flex wants to bring onto its own balance sheet instead of running through a partner bank.
Flex’s proposed CEO for the new bank, Jeff Berkson, spent years as chief risk officer at WebBank, the Utah industrial bank that underwrites credit for a long list of fintechs, Affirm included. Hiring the risk officer from the industry’s default bank-of-record to go build your own is the tell: Flex isn’t just adding a product line, it’s cutting out the middleman that takes a cut of every loan.
Square’s industrial bank won FDIC approval in 2020 to originate merchant loans directly, and the agency has been saying yes more often lately — Edward Jones got the nod as well.
The capital math is the real cost here. Standing up a chartered bank means holding capital against leverage ratios instead of paying a partner-bank fee per loan. Whether that trade pencils out depends entirely on how fast FDIC and Utah regulators move, and Edward Jones waited nearly six years for its yes.
Diana Kowalski