Sezzle Seeks National Bank Charter to Expand Services

Sezzle has applied to establish a national bank in the US, looking to expand beyond its buy now, pay later (BNPL) business into deposit accounts and other banking services.

The Minneapolis-based fintech announced on October 22 that it had submitted an application to the Office of the Comptroller of the Currency (OCC) for a national bank charter and sought deposit insurance from the Federal Deposit Insurance Corporation (FDIC).

If the application is approved, Sezzle Bank will offer what it calls “a broad range of banking products and services,” with federally insured deposit accounts, including checking and savings accounts, alongside credit products. The company said it would target digitally native consumers, including people new to credit who tend to avoid traditional products such as credit cards.

“Applying for a national bank charter reflects our commitment to operating under the highest standards of federal oversight,” said Charlie Youakim, Sezzle’s chief executive and executive chairman.

He added the charter would allow the company to offer a broader range of products under the same federal supervision that applies to national banks.

Sezzle had previously planned to pursue an industrial loan company license through Utah regulators, but Youakim said in August that new state-level BNPL regulations and criticism of the industrial loan company model had prompted the rethink.

According to Sezzle, there will be no immediate change for existing customers, and it will continue working with its current lending partners while the application is reviewed.

The OCC, Federal Reserve, and FDIC review process is expected to take 12 to 18 months, Youakim said, and regulatory approval is not guaranteed.