Oportun Financial Corporation (OFC) has applied for a national bank charter in the US with banking watchdog the Office of the Comptroller of the Currency (OCC).
Oportun is seeking a banking licence to set up Oportun Bank, which will be a subsidiary of Delaware-incorporated OFC.
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Oportun Bank will offer consumer lending and deposit services in all the 50 US states, if approved.
Oportun currently offers a fully “amortised” personal loan as its core product, with a 36% annual percentage rate (APR).
The newly established bank will also cap its credit products at an APR of 36%.
Oportun said it does not rely on credit scores or credit history to offer loan products to its customers.
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By GlobalDataIt uses a machine learning (ML)-backed proprietary scoring and risk model and 15 years of data to provide loans to underserved individual with low and moderate income (LMI).
On average, Oportun’s customers earn a gross income of $46,000 per year.
Established in 2005, Oportun has provided over $9.3bn in credit to the LMI community. It offered cost savings of over $1.8bn in interest and fees.
Additionally, the company also helped more than 870,000 individuals establish their credit history.
Oportun CEO Raul Vazquez said: “A national bank charter will allow us to reach the estimated 100 million LMI consumers in the US that we seek to serve.
“Today, Oportun maintains dozens of state licenses in order to offer affordable and responsible financial services to LMI communities.
“As a national bank, we can efficiently provide the security of dealing with a federally regulated and supervised bank to our customers and other stakeholders.”
Recently, Oportun partnered with a national bank to serve LMI consumers, beyond the scope of its state-licensed footprint,
Under this partnership, Oportun will offer personal loans to the US consumers starting from mid-2021.
Last month, US digital personal finance company SoFi won the preliminary approval from the OCC for a national bank charter.
