Flex ILC Filing Tests Direct Bank Route For Rent Credit
Flex has applied for an industrial loan company charter that would let it issue Flex Rent directly, with Banking Dive reporting more than $40 billion in processed rent since 2019.
Flex is seeking an industrial loan company charter that would let it issue rent-payment credit through a bank it controls instead of relying only on sponsor banks.
The application to the Federal Deposit Insurance Corp. and Utah’s Department of Financial Institutions proposes a Salt Lake City-area digital bank serving customers nationally.
Approval would make that bank the direct issuer for Flex Rent and related credit products.
Flex Wants A Direct Bank Channel For Rent Credit
The platform currently relies on Lead Bank and Column Bank as sponsor banks.
A successful ILC charter would make those partnerships unnecessary for the products covered by the proposed bank, shifting issuance of rent-payment credit from partner-bank infrastructure to a regulated banking unit under the company's control.
The business case rests on rent timing rather than discretionary purchases.
CEO and co-founder Shragie Lichtenstein stated that a bank charter would place the products on a base of federal deposit insurance plus state and federal bank oversight.
The rent-payment platform presents rent as a recurring household bill that often does not match renters' pay cycles.
Company Figures Put Rent Volume Above $40 Billion
Company figures show more than $40 billion in processed rent since 2019, over 3.2 million users, and more than $780 million in avoided late fees.
The product design also includes no compounding interest and no stacking of loans.
Those numbers provide regulators a consumer-scale record to examine before any approval.
They do not settle the banking-policy dispute around ILCs, as the charter would allow a nonbank commercial owner to run an insured industrial bank without becoming a bank holding company like a traditional bank parent.
ILC Applications Are Drawing More Policy Scrutiny
The application arrives during a broader return of charter activity.
FDIC Chair Travis Hill last year promoted the ILC charter as one route for creating new banks, with recent or pending ILC moves involving Klarna, Stellantis, Ford, GM, and Edward Jones.
Opposition is centered on oversight.
Some lawmakers, backed by banking groups, have argued that ILCs can avoid Federal Reserve supervision when they do not offer demand deposit accounts.
Sens. John Kennedy and Andy Kim introduced a January bill aimed at closing the "shadow banking loophole." A separate proposal from Kim and Sen. Elizabeth Warren would pause approvals for commercially owned ILCs unless those entities are classified as banks under the Bank Holding Company Act.
The Independent Community Bankers of America warned in May that removing the Fed from ILC supervision creates a safety-and-soundness gap and adds systemic risk.
This objection turns the filing into more than a product-expansion step: approval would place a rent-focused credit platform in the same charter channel now being tested by other fintech, auto, and investment groups.
Jeff Berkson, formerly chief risk officer at WebBank, is named as the proposed bank's CEO.
The application does not include an FDIC decision date, leaving the approval timetable outside the public record.
