February 25, 2026
Chairman Travis Hill
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, DC 20429
Submitted via FDIC Portal for Pending Bank Applications and by email: comments@fdic.gov
Sandy O’Laughlin, Commissioner
Nevada Financial Institutions Division
Licensing Office
1830 College Parkway, Suite 100
Carson City, NV 89706
By email: FIDLicensing@fid.state.nv.us and Fidmaster@fid.state.nv.us
Re: NCRC Comment in Opposition to Affirm Holdings, Inc.’s application to the Nevada Financial Institutions Division and the Federal Deposit Insurance Corporation for approval to establish Affirm Bank, an industrial bank to be chartered by the State of Nevada.
Dear Chairman Hill and Commissioner O’Laughlin:
The National Community Reinvestment Coalition (NCRC) appreciates the opportunity to comment on Affirm Holdings, Inc.’s (Affirm) application for federal deposit insurance, which is being submitted in conjunction with Affirm’s application to the Nevada Financial Institutions Division (NFID) for an industrial bank charter (also known as an industrial loan corporation or “ILC”) to establish Affirm Bank. Because the FDIC’s review of the deposit insurance application is a critical component of the overall ILC chartering process, absent improvements to Affirm’s Community Reinvestment Act (CRA) plan, we urge the FDIC to reject this application. Regardless of the outcome of the approval process, NCRC would gladly work with Affirm to develop a more robust CRA plan and collaborate to create Community Benefit Agreements (CBAs).
NCRC is a network of more than 700 community-based organizations dedicated to creating a nation that not only promises but delivers opportunities for all Americans to build wealth and attain a high quality of life. We work with community leaders and policymakers to advance solutions and build the will to solve America’s persistent racial and socio-economic wealth, income, and opportunity divides, and to make a Just Economy a national priority and a local reality.
NCRC detailed its opposition to the ILC charter in its September 18, 2025, letter to the FDIC (the “NCRC Letter Opposing ILC Charters”), citing significant safety and soundness risks, inadequate CRA expectations, and untested fair lending models that allow evasion of consumer protection laws.[1]
While these concerns apply broadly to all ILC charters, this letter focuses on how the first two risks—safety and soundness vulnerabilities and inadequate CRA obligations—would be particularly acute for Affirm Bank as a Nevada chartered industrial bank. The size of Affirm’s parent company and its extensive national footprint elevate safety and soundness risks and pose potential threats to the stability of the FDIC deposit insurance fund. At the same time, Affirm Bank’s community reinvestment obligations would be insufficient and misaligned with its nationwide service area. Affirm’s proposed CRA plan does not adequately mitigate these risks. Therefore, we provide recommendations below aimed at substantially strengthening Affirm’s community reinvestment commitments should the FDIC decide to continue evaluating the application.
I. Safety and Soundness Risks Inherent in the ILC Framework
The Bank Holding Company Act embodies the long-standing principle of separation of banking and commerce—a principle established to prevent conflicts of interest, limit concentration of economic power, and protect the deposit insurance fund from commercial risk. This separation exists because commercial enterprises can engage in riskier activities than banks and allowing commercial companies to own banks creates the potential for unsafe affiliations, preferential lending to affiliates, and the potential for reputational contagion that could threaten depositor funds. Traditional bank holding companies face consolidated supervision by the Federal Reserve, including capital requirements, stress testing, and oversight of affiliate transactions. This comprehensive framework ensures regulators have visibility into the entire corporate structure and can assess risks that might threaten the insured institution.
If the ILC charter is granted to Affirm, the company will not be required to register as a bank holding company with the Federal Reserve Board and therefore will not be subject to Federal Reserve regulation and supervision. The FDIC supervises only the ILC subsidiary itself, not the commercial parent or the web of affiliated entities that may pose risks to the insured institution.
Affirm’s proposed ILC charter would perpetuate these structural weaknesses. Without consolidated Federal Reserve supervision, regulators would lack complete insight into how Affirm’s commercial operations, lending models for its loan products, and its international activities, might affect the safety and soundness of the insured bank subsidiary. The potential for affiliate transactions, shared operational infrastructure, reputational risk transmission, and capital migration between the commercial parent and the bank creates supervisory challenges that the current ILC framework is ill-equipped to address. The absence of a federal regulator with visibility into the entire corporate structure leaves blind spots that can threaten both individual institutions and systemic stability.
Affirm is a point-of-sale lender, offering traditional installment loans and Buy Now, Pay Later (BNPL) “pay in four” loans. Affirm originates these loans at the point of sale to finance consumers’ purchase of goods and services. BNPL loans are designed for consumers to repay in four or fewer installments and pay no interest. The Consumer Financial Protection Bureau’s public complaint portal contains over 25,000 complaints related to Affirm over the last three years. The majority relate to consumer reporting concerns.[2]
In 2023, the OCC issued guidance regarding BNPL lending that highlighted potential credit, compliance, operational, and strategic risks to banks.[3] It also identified potential risks to both consumers and banks, including borrower overextension, lack of understanding of terms, loan stacking, underwriting challenges given lack of credit history, fraud risks, etc.[4] Affirm plans for its ILC bank to offer its unsecured loan installment and BNPL loan products, using its current technology and infrastructure platform.[5] It will also offer retail deposits and virtual card products to existing and new customers.[6] It is unclear how Affirm plans to address the potential risks its products may pose to its proposed ILC bank, as well as to consumers.
According to its 10-K statement, it directly or through its bank partnerships originated billions of loans in 2025.[7] There are potential safety and soundness risks where a parent of an ILC is so large and serves so many consumers, including internationally. The interconnectedness and scope of Affirm’s operations go far beyond what the ILC framework is designed to supervise.
II. Affirm’s ILC Charter Would Result in Community Reinvestment Commitments Inadequate for Its National Service Area.
In general, ILCs face minimal requirements under the CRA, a key law designed to prevent redlining and ensure that banks are meeting the credit needs of all communities within its footprint. Like other recent ILC charter applicants,[8] Affirm’s application to charter a Nevada industrial bank exploits the CRA’s conventional designation of assessment areas around physical branches that is not adequate for non-traditional banks that lack a branch network but operate nationwide.
Affirm’s ILC charter application sets out a CRA plan with various metrics, similar to a strategic plan. If approved, Affirm Bank’s CRA obligations would be severely limited despite operating the fifth most offered pay-later service globally; fourth most in the US.[9] Affirm Bank would be headquartered in Henderson, Nevada and “operate nationally as an online branchless bank.”[10] But, its assessment area would be limited to Las Vegas-Henderson – North Las Vegas metropolitan area,[11] a fraction of its operational footprint that excludes the vast majority of the markets where it conducts business and derives revenues.
Granting deposit insurance to Affirm Bank would give it the privileges of federally insured deposits and would facilitate a bank charter while avoiding the comprehensive community reinvestment duties that Congress intended for institutions serving the public at such scale. The combination of the ILC structure’s inherent limitations and Affirm’s lacking CRA plan would result in community reinvestment obligations wholly disproportionate to Affirm’s size, scope, and national significance.
III. NCRC’s Recommendations for Affirm’s CRA Plan
NCRC objects to Affirms ILC Charter as currently proposed. Should the FDIC move forward with consideration, Affirm’s proposed CRA Plan requires substantial improvements to meet the statutory requirements of the Community Reinvestment Act. The plan suffers from the same structural deficiencies common to ILC CRA plans: artificially narrow assessment areas that ignore the institution’s actual service footprint, community development goals based on deflated balance sheets that do not reflect true lending capacity, and inadequate community engagement.
To ensure that Affirm’s community reinvestment commitments are commensurate with its national operations and the privileges of a federal bank charter, NCRC recommends the following modifications:
- Update CRA goals to include goals for larger area. Regulatory guidance states that banks may receive favorable consideration for community development activities that benefit broader statewide or regional areas that include the bank’s assessment areas “as long as the institution has been responsive to community development needs and opportunities in its assessment area(s).”[12] In fact, each of the three peers Affirm identified in its CRA plan reported community development activities outside of their assessment areas in their last CRA performance evaluations.[13] Affirm should update its proposed goals to include goals for a broader statewide or regional area and increase its cumulative community development loan and investment (CDLI) goals to reflect community development activities within and outside its assessment area. Moreover, if approved, Affirm Bank should consider establishing branch locations or loan productions offices in several locations throughout the U.S., based on Affirm’s current transaction volume, to broaden the proposed Affirm Bank assessment area.
- Set higher CDLI goals. In its CRA plan, Affirm proposes for the purposes of evaluation of its CRA performance that a cumulative CDLI goal of 0.5%-1.0% of average assets would result in a supervisory performance rating of Satisfactory and 0.75%-1.25% would result in an Outstanding rating. One of the peers it identified in its application, Toyota Financial Savings Bank (Toyota) was able to achieve 2.3% of average assets dedicated to only CRA-qualified investments and grants and received an Outstanding rating in its 2024 CRA performance evaluation. In Toyota’s 2021 CRA performance evaluation, its investment and grant level of 1.0% of average assets resulted in a Satisfactory rating. Given its peer met higher levels of CRA activity, Affirm should raise its CDLI goals.
- Expand the assets to be considered in connection with CRA goals. Affirm Bank’s CRA goals should be based on the consolidated assets and activities of Affirm Holdings Inc., not just the artificially limited assets held within the proposed ILC subsidiary.
- If Affirm were to prepare a strategic plan, it should:
o Address Affirm’s core business of consumer lending. Its CRA plan outlined in its ILC charter application does not include goals related to consumer lending, even though it notes that one of the economic characteristics of its Las Vegas assessment area is the low wages typical of Las Vegas’ hospitality and leisure sectors that “contribute to income instability and increase affordability pressures for many LMI households.”[14] Affirm appears to presume that its consumer lending products meet the needs of LMI communities without identifying specific ways in which they meet community needs or whether there are other ways to meet community consumer lending needs that do not involve the financing of small dollar purchases of goods or services.
o Facilitate public comment on its draft plan. Banks are required to informally seek input during the drafting of a strategic plan and post draft plans in at least one newspaper in their assessment areas for a 30-day comment period, as well as making the plan available in branches.[15] In practice, these notices are largely placed in trade papers that are not widely read by the public and nonprofit organizations active in community development. As a result, opportunities to comment on draft strategic plans are very limited as many stakeholders are unaware that banks have proposals for how they will serve their communities available for comment. The regulations do not prevent Affirm from also posting draft strategic plans on its website. The agencies noted “the importance of constructive community involvement in the plan process” when the 1995 rules were finalized, and taking this simple extra step would significantly increase the public’s ability to comment on the merits of Affirm’s potential strategic plan.[16]
The FDIC should condition any approval of Affirm’s ILC charter application on the negotiation of Community Benefit Agreements (CBAs). NCRC and our members stand ready to work with Affirm on a collaborative process to create CBAs where nonprofit and bank leaders discuss community needs and opportunities for CRA-related financing. CBAs commit banks to increasing CRA activity and directing it to where it is needed most. One would be hard-pressed to think of a more ideal model of CRA implementation.
For nontraditional banks such as ILCs, the credit needs of the communities to be served must not stop at the headquarters location of the ILC but extend across all the geographical areas in which it makes loans and conducts business. Affirm’s ability to serve needs is not confined to its headquarters location since it has a long-established infrastructure enabling it to serve customers nationwide.
Thank you for the opportunity to offer our input on this important deposit insurance application. If you have any questions, please contact me at jvantol@ncrc.org, or my colleague, Tara Flynn at tflynn@ncrc.org.
Thank you for your consideration.
Sincerely,
Jesse Van Tol
President and CEO
NCRC
[1] National Community Reinvestment Coalition, NCRC Comment Opposing Industrial Loan Companies (Sept. 18, 2025), https://ncrc.org/ncrc-comment-opposing-industrial-loan-companies/.
[2] Consumer Fin. Prot. Bureau, Consumer Complaint Database: “affirm” Search Results, https://www.consumerfinance.gov/data-research/consumer-complaints/search/?chartType=line&dateInterval=Month&dateRange=3y&date_received_max=2026-02-16&date_received_min=2023-02.
[3] Office of the Comptroller of the Currency, OCC Bulletin 2023‑37 (Nov. 16, 2023), https://www.occ.gov/news-issuances/bulletins/2023/bulletin-2023-37.html.
[4] Id.
[5] Application to the Nevada Financial Institutions Division and the Federal Deposit Insurance Corporation by Affirm Holdings, Inc. for approval to establish Affirm Bank, an industrial bank to be chartered by the State of Nevada (submitted Jan. 23, 2026) (Affirm Application) at 5.
[6] Id.
[7] Affirm Holdings, Inc., Annual Report (Form 10‑K), https://www.publicnow.com/view/16A80C32B5832CEAE6B7EF8866A00E9459538250.
[8] Block, Inc. is another large corporation with a nationwide service that recently applied for, and was granted, a Utah industrial bank charter. Block, Inc. is now parent company to Square Financial Services, Inc., which established one assessment area of the Salt Lake-Provo-Orem Utah Combined Statistical Area (CSA), although less than 1 percent of the small business lending activity of Square occurs in that market. See CRA Exam of Square Financial Services, Inc. (Mar. 2023), at 9, https://crapes.fdic.gov/publish/2023/59177_230314.PDF.
[9] CapitalOneShopping.com, Buy Now, Pay Later Statistics, https://capitaloneshopping.com/research/buy-now-pay-later-statistics/.
[10] Affirm Application, Attachment D at 4.
[11] Id. At 5.
[12] Community Reinvestment Act; Interagency Questions and Answers Regarding Community Reinvestment; Guidance, § __.12(h)–6, 81 Fed. Reg. 48,529, 48,529–30 (July 25, 2016), https://www.govinfo.gov/content/pkg/FR-2016-07-25/pdf/2016-16693.pdf.
[13] Toyota Financial Savings Bank 2024 CRA Performance Evaluation, at 6, https://crapes.fdic.gov/publish/2024/57542_240528.PDF; Axos Bank 2023 CRA Performance Evaluation, at 4, https://occ.gov/static/cra/craeval/Oct23/716456.pdf; Credit One Bank, N.A. 2025 CRA Performance Evaluation, at 8, https://occ.gov/static/cra/craeval/Aug25/20291.pdf.
[14] Exhibit D – Affirm Bank CRA Plan, at 8.
[15] 12 C.F.R. § 25.27 (d).
[16] Community Reinvestment Act Regulations, 60 Fed. Reg. 22,156, 22,168 (May 4, 1995), https://www.govinfo.gov/content/pkg/FR-1995-05-04/pdf/95-10503.pdf.
