FinTech: Blockchain-Based Financial Services Provider Figure Tech Eyes Banking Charter

November 11, 2020 | FinTech, News
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Figure Technologies Ltd is led by co-founder and CEO Mike Cagney, who was formerly CEO at SoFi.

San Francisco-based Figure Technologies offers financial services using the blockchain. These include home equity lines, mortgage refinance, a marketplace for buying and selling loans, digital fund services, asset management, and cap table management. Figure said it had applied last week for a national bank charter from the Office of the Controller of the Currency (OCC). (San Francisco Business Times)

Charter to reduce the regulatory burden

Figure anticipates that as a chartered bank, it will gain the twin advantages of reducing its regulatory burden at numerous states across the country as well as be able to expand its product offerings for customers.

Last month, fintech SoFi received preliminary, conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) over its application for a national bank charter.

A banking license would clear the path for SoFi to directly accept deposits from customers and make loans. It would not have to route transactions through another chartered bank.

“Figure is pursuing the charter to reduce the complexity of our business – we’ll have over 200 state licenses next year without such a charter,” said Cagney in a statement. “By reducing complexity, we can leverage the technology efficiencies we have to deliver financial solutions to traditionally underserved and underrepresented consumers, driving real financial inclusion.”

Figure Tech

Mike Cagney founded Figure Tech in 2018 with his wife June Ou. It achieved unicorn status last year after raising $103 million at a valuation of more than $1.2 billion, according to Forbes.

The fintech also has the distinction of conducting the biggest securitization of home equity lines of credit (HELOCs) in the past decade. In September, Figure sold a $308 million unrated securitization backed by the HELOCs on the company’s platform.

Figure conducts its financial services on the Provenance blockchain platform. “Figure has de-risked blockchain across a variety of verticals—lending, fund services, payments,” Cagney wrote in an email to Forbes.

The fintech says its use of blockchain technology has slashed the time taken in home loan origination. It has also cut origination, financing, servicing, and capital markets execution costs through the use of the blockchain.

“This national bank charter will be instrumental in our efforts to continue to develop and deliver new financial products and services to communities across this country that really haven’t had access to affordable offerings,” said C. D. Davies, Head of Lending.

Davies will lead the company’s efforts to obtain the bank charter from the OCC and will also become CEO of Figure Bank.

Related Story: Loans at Figure Tech Jump 300% after Rate Cut by the Fed

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