Upgrade Applies For Nevada ILC Charter To Launch Its Own FDIC Insured Bank
San Francisco-based fintech Upgrade has moved to secure its own banking platform by filing applications for a Nevada industrial loan company charter.
The Fintech-focused company submitted the paperwork on October 12, 2026, to both the Nevada Financial Institutions Division and the Federal Deposit Insurance Corporation, seeking approval to form Upgrade Bank as a wholly owned, state-chartered subsidiary.
The proposed institution would operate under FDIC insurance with independent governance and internal controls.
Upgrade has emphasized that the structure is intended to complement, rather than displace, its longstanding ties to partner banks and entities that purchase the loans it originates.
By adding a captive bank, the firm would gain greater flexibility and more avenues for funding the credit products it offers to consumers, while continuing to work with existing counterparties.
Since its launch in 2016, Upgrade has extended more than $53 billion in credit to over 8.5 million customers.
The company focuses on affordable, responsible financing for mainstream consumers, offering mobile banking, buy-now-pay-later options, personal loans, credit cards, and auto financing.
Currently, loans and credit lines are issued through partner institutions—Cross River Bank, a New Jersey-chartered commercial bank operating from a Delaware branch, and Celtic Bank, a Utah-chartered industrial bank—both of which are FDIC-insured.
To lead the proposed bank, Upgrade has named Virginia Varela as chief executive.
Varela already heads the company’s banking strategy and brings more than 35 years of experience in banking supervision and financial services.
Her prior roles include serving as an officer at SoFi Bank and as president and chief executive of Golden Pacific Bank until SoFi acquired it in 2022.
She has also served as chief executive, president, or board member at multiple banks and as a director of the Federal Home Loan Bank of San Francisco.
The initial board of directors is expected to include Varela, Upgrade co-founder and chief financial officer Jeffrey Bogan, and independent directors Raymond Specht, Daniel Quan, and Dalibor Snyder.
In a statement, Varela said the team is excited about the possibility of establishing a new bank to advance Upgrade’s mission of delivering responsible, affordable credit.
The applications remain subject to regulatory review, with no assurance of approval and no fixed timeline for a decision.
The filing arrives amid a broader increase in interest among nonbank financial firms in industrial loan company charters.
These charters allow a parent company to own an FDIC-insured bank without becoming subject to consolidated supervision by the Federal Reserve as a bank holding company, provided certain restrictions on deposit products are observed.
In recent years, the Federal Reserve has granted conditional approvals for several such applications, particularly among auto lenders and other specialized financial companies, alongside a relatively modest number of new filings compared with other charter types.
Banking industry groups have historically raised concerns about the model, citing limited federal oversight of parent companies and the blending of commercial and banking activities, though opposition has been quieter than debates over certain other specialized charters.
For Upgrade, the move represents a strategic step toward greater control over funding while preserving the partnerships that have supported its growth to date. It now remains to be seen if regulators ultimately grant the charter. It will determine how fully the company can integrate a captive bank into its existing credit platform.
