For years, fintechs have been inching closer to the bank charter line—sometimes tiptoeing, sometimes sprinting, often stopping just short due to regulatory complexity. Propel Holdings, a Toronto-based fintech focused on providing credit access to underserved consumers, has now crossed a meaningful threshold: it has secured approval from Puerto Rico’s Office of the Commissioner of Financial Institutions (OCFI) to establish Propel International Bank, Inc., or simply Propel Bank.

This new entity isn’t a traditional bank charter, nor is it one of the experimental “bank-like” structures fintechs flirt with. Instead, it’s something more strategic: a licensed International Financial Entity (IFE), a regulatory framework unique to Puerto Rico that blends U.S. federal oversight with operational flexibility suited to modern, technology-driven financial services.

For Propel, this marks a major evolution of its long-running fintech–bank partnership model—and a potential blueprint for other fintechs looking to deepen their infrastructure without becoming full-fledged bank holding companies.

Why the IFE Route Matters

IFEs sit in a uniquely powerful spot in the U.S. financial landscape. They are:

• Based in a U.S. jurisdiction
• Governed by U.S. federal laws—including AML statutes like the Bank Secrecy Act and the PATRIOT Act
• Overseen locally by the OCFI
• Able to offer a variety of financial services to customers domestically and globally

In other words, IFEs blend the trust and compliance rigor of U.S. banking with the adaptability fintechs crave. It’s a regulatory regime increasingly attractive to companies looking to scale services without inheriting the full weight of a national bank charter.

For Propel, which already operates a high-volume lending infrastructure, the IFE model offers a natural next step.

“Propel Bank marks the next step in our journey to become global leaders by strengthening our partnership platform, expanding our reach, and opening new pathways for growth,” said Clive Kinross, CEO of Propel Holdings. “This approval validates the strength of our team, our technology, and the business we’ve built.”

What Propel Bank Will Actually Do

At launch, Propel Bank won’t look like a consumer-facing neobank and won’t turn Propel Holdings into a bank holding company. Instead, it will function as a core servicing engine for Propel’s bank partners, offering:

• Underwriting
• Compliance operations
• Customer service
• AI-powered servicing capabilities

That may sound unglamorous compared to consumer-facing apps, but it’s where much of fintech’s real value is created: in the infrastructure behind the scenes, where speed, scale, accuracy, and risk controls intersect.

Propel Bank gives Propel something it didn’t have before—a regulated entity under its full ownership that can support both existing relationships and future product expansion.

Strategic Upside: New Markets, New Products

Propel highlights two major long-term benefits:

1. Product & Service Diversification

With IFE licensure, Propel Bank could expand into traditional banking products—subject to regulatory approval. While the company hasn’t detailed specific offerings, common IFE services include deposit products, payment services, and lending variations.

The important part: the path is now open.

2. Expanded Market Access

IFEs allow institutions to serve customers beyond their home jurisdiction. That could give Propel access to new geographies, additional partners, and a broader consumer base—an attractive proposition for a fintech heavily focused on responsible credit access.

The Long Road to Approval

Regulatory approvals of this scale are rarely quick. OCFI’s green light came after multi-year investments in compliance, governance, and operational infrastructure—a clear sign that Propel spent considerable time building toward bank-grade maturity.

The OCFI approval also signals institutional trust in Propel’s ability to operate a scalable, compliant financial institution, not just a fintech platform.

For an industry where “regulatory readiness” separates survivors from headlines, this matters.

Operational Timeline: 2026 and Beyond

Propel Bank will be:

• Headquartered in Puerto Rico
• Managed by a dedicated local leadership team, already identified
• Led operationally by Noah Buchman, Propel’s President and Chief Revenue Officer, who will also serve as President of Propel Bank
• Powered by Propel’s AI-driven technology, enabling scalable underwriting and servicing
• Expected to go live in the first half of 2026

By outsourcing nothing and centralizing core functions under a regulated entity, Propel positions itself to operate more efficiently—and potentially more profitably—over the long term.

Why This Move Fits the Broader Fintech Trend

Fintech’s next era isn’t about apps—it’s about infrastructure. Companies that once relied on partner banks are increasingly exploring hybrid models:

• Fintech front end
• Proprietary or owned regulatory infrastructure
• Partner banks and licensed entities layered into the ecosystem

Propel’s move parallels strategies seen from firms like Block (via its industrial bank), Brex (via its banking partnerships), and Revolut (via its global licensing push). But Propel’s IFE approach is tailored to its role: providing credit access, underwriting, and servicing on behalf of banks.

Instead of replacing partners, Propel Bank evolves the relationship, making the company a more sophisticated, more resilient counterpart.

The Bottom Line

Propel Bank represents far more than a new licensed entity. It’s a structural upgrade—a shift from fintech dependent on partners to fintech capable of powering those partners at a deeper level.

As competitive and regulatory pressures mount across the consumer credit landscape, owning a compliant, bank-grade servicing engine could be a decisive advantage.

And with a 2026 operational target, Propel now has a clear path toward building a more expansive, more globally capable financial ecosystem.