Banking News

Blockchain firm Figure secures $100m JP Morgan mortgage financing as bank license hopes dented

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Yesterday blockchain startup Figure Technologies announced its subsidiary Figure Lending had secured a $100 million facility from JP Morgan for conforming and jumbo mortgages. Conforming mortgages can be bought by Fannie Mae and Freddie Mac, whereas jumbo mortgages cannot. The startup uses its website to originate home equity loans, mortgage refinancing and personal loans.

Figure says it has secured $1.5 billion of lending facilities across five funding deals, including a billion-dollar facility from Jefferies. The company said its mortgage lending business grew 100% month on month in the fourth quarter of 2020, without providing specific figures.

All the mortgages are logged on its Provenance blockchain, which is also used to package up the debt as mortgage backed securities.

In November, Figure applied to the Office of the Controller of the Currency (OCC) for a national banking charter. It already has around 100 state-issued licenses and with the planned launch of Figure Pay, it says the licenses will rise to more than 200. 

The application is a controversial topic and the Conference of State Bank Supervisors has sued the OCC. It claims the OCC doesn’t have the authority to grant a national banking license to Figure without FDIC insurance. Crypto-friendly Acting Comptroller Brian Brooks is leaving his role today, which may make it harder to secure the bank charter.

Meanwhile, Figure Pay aims to target the underbanked. “One of the key differentiators of Figure Pay is a small dollar loan offering available to every member, including thin file or previously credit-challenged consumers,” says Figure. 

To date, the company has raised at least $233 million in equity financing, not including money raised directly by Provenance.