Klarna is asking US regulators for an industrial bank charter that would bring more of its deposits, funding and payments infrastructure under the fintech’s own regulated bank, rather than leaving those functions with partner banks.

The Swedish company filed applications with the Utah Department of Financial Institutions and the Federal Deposit Insurance Corp. to establish Klarna Bank USA.

Klarna said on Monday that the proposed institution would support payments, savings, lending and merchant services.

Klarna Bank USA Filing Covers Deposits, Payments And Lending

Klarna already operates as a licensed bank in Europe, but its US banking activity still depends heavily on partner institutions.

The proposed Utah-chartered industrial bank would let Klarna take more direct responsibility for deposits, funding and payment operations under US banking regulation.

Klarna said consumer deposits represented more than 90% of its total funding, citing its latest earnings release.

That figure makes the charter bid a funding-control story as well as a payment-services application.

Those functions put the application beyond buy now, pay later credit and into regulated banking activities that fintech companies often handle through sponsor-bank relationships.

FDIC Insurance Would Bring Bank-Level Supervision

A licensed industrial bank can take insured deposits, originate loans, use federal payment rails and issue payment products.

The same structure can let a parent company avoid becoming a bank holding company if statutory conditions are met.

The trade-off is supervision.

The FDIC deposit-insurance process requires applicants to receive state charter approval before federal insurance is secured.

Regulators review whether an applicant has enough capital, experienced managers, workable governance, risk controls, a credible business plan, liquidity, cybersecurity, compliance systems and long-term financial viability.

The FDIC framework for industrial banks requires parent companies to accept ongoing reporting, examinations and commitments.

Later changes to business strategy, senior management or governance can require regulatory review.

Utah Industrial Bank Model Has Fintech Precedents

The charter is not untested for technology-linked finance companies.

Square Financial Services, now part of Block, uses a Utah industrial bank to serve sellers with business banking, commercial credit and payment services.

Other precedents named in the coverage include Nelnet Bank, Thrivent Bank and GM Financial.

GM Financial secured approval only after revising and refiling its application, showing that the process can require multiple rounds of regulatory review.

The timing also follows renewed attention to de novo banking charters.

Office of the Comptroller of the Currency guidance issued in June sought to give applicants more clarity about licensing standards, while federal regulators have been more willing to evaluate new applications.

Approval Timeline And Conditions Remain Undisclosed

Klarna’s filing is a bet that control over deposits, payment processing and product development is worth the added scrutiny of operating an insured bank.

It could reduce dependence on outside institutions as the company broadens beyond buy now, pay later.

The filing still has several open conditions.

Klarna has not disclosed an approval timetable, FDIC deposit-insurance conditions, final capital commitments, state charter decision date or launch date for Klarna Bank USA.