- Key insight: As fintechs rush to gain bank charters, their leaders are about to step into a very new compliance environment. They need to understand what they're getting themselves into.
- Supporting data: In 2025, there were as many bank charter applications filed with the OCC as there were in the previous four years. Less than halfway through 2026, and we've almost surpassed 2025's figure.
- Forward look: The regulatory environment is opening doors. Fintechs need to make sure they're ready to walk through them.
People sense a once-in-a-generation opportunity
And if I were to address an imaginary graduation of the "Fintech Charter Class of 2026," it might go something like this:
First off, congratulations, and
So as this class of fintechs looks out into a new life as a bank, here's what I think you should know about regulatory compliance, so you can make the jump with your eyes open.
Despite lingering myths, I think most fintechs are actually pretty good at customer-facing compliance in 2026. Any fintech operating at some meaningful scale has had to invest in Bank Secrecy Act/anti-money-laundering infrastructure. They've built compliance programs and had to demonstrate their seriousness to a partner bank.
This is really just product-line compliance though. A fintech's compliance focus is narrow and tailored to the specific product's laws and regulations.
Becoming a bank is a different story. You move from a product manager to a head office view. Consumer compliance is an element, but more critical is understanding the way that regulatory bodies look at growth, capital, liquidity and earnings. It stops being about whether an individual thing follows the rules. It starts being about the health of your entire business.
Assessing the full health and stability of a bank, regulators take a broad view. The FDIC assesses banks through its CAMELS framework (short for Capital, Asset Quality, Management, Earnings, Liquidity and Sensitivity to market risk). These are fundamentally not fintech topics or considerations, but quickly become front of mind when you have a bank charter.
For instance, many of the best-known fintechs run at a loss. Having negative earnings is a real problem for a bank. Regulators consider this very differently than investors. How long is a lack of profitability acceptable? What capital levels are necessary for the level of risk in your business?
As a bank, capital and liquidity buffers also don't just cover your run rate, they cover what the regulator requires you to hold in reserve.
Rising assessment fees and the fear of punitive actions under newly installed state regulator Rohit Chopra may push some California-chartered banks to switch to a federal overseer, some industry observers say.
On the customer front, many fintechs are successful because they have expanded financial inclusion and identified unmet needs. These pockets of borrowers are often left behind because the regulatory guidelines leave banks unable to address these customer sets. Becoming a bank will now mean that asset quality and affordability will be scrutinized in a way that might run counter to a core value proposition.
The constraints of getting this wrong compound suddenly. A "needs improvement" designation on your first exam means you don't get to launch new products. Which becomes a problem quickly.
The above two factors mean that when you have a bank charter you will need to rewrite your business plan for a new set of stakeholders. You now have two fundamentally opposing audiences, investors and regulators, which can then bring compliance and innovation into direct conflict.
Your original growth plan is what you have shown investors up until now. It shows how fast you plan to grow, how much revenue you're projecting, what markets you want to enter, and likely shows negative income to fuel growth. The new plan is for a regulator, and tackles your earnings trajectory, capital adequacy and liquidity management (among many other things).
The second plan will almost certainly not agree with the first. And that tension becomes one of the least-discussed operational realities of running a chartered bank.
While the wild west days of fintech are behind us, there can still be a lingering perception that compliance is a tax on growth. The fintechs who will succeed working with a bank charter are the ones that can set this idea aside, and see compliance as a capability as important as any product feature. A compliance program should be seen as infrastructure, the same as your payments stack or underwriting model. If your payments stack breaks, everything bottlenecks. Compliance is no different.
And for those founders in this incoming class of banks-to-be who have developed a migraine just from reading this, know that none of this is an argument against fintechs pursuing bank charters. The benefits from regulatory independence are real. The benefits of direct access to deposits for funding are quantifiable. But the costs and challenges are real, too, and the status quo has been working for a reason. For scaled, mature fintechs who are already thinking deeply about things like corporate governance, with strong earnings and deep balance sheets, it could be a huge win.
The regulatory environment is opening doors. Fintechs need to make sure they're ready to walk through them.
