Propel Holdings Secures Approval to Establish Propel International Bank
Propel Holdings Secures Approval to Establish Propel International Bank
Toronto-based digital lending player Propel Holdings has received regulatory approval from the Office of the Commissioner of Financial Institutions of Puerto Rico (OCFI) to establish Propel International Bank, a wholly owned subsidiary of Propel that will operate as an International Financial Entity.
The new entity will function within a regulated U.S.–aligned compliance framework and is expected to become operational in the first half of 2026, supporting existing and future bank partners with consumer lending services without requiring the company to become a bank holding company.
Key Highlights of the Regulatory Approval
Authorization to Operate as an International Financial Entity (IFE): Propel Bank is licensed under Puerto Rico’s International Financial Entity (IFE) regime, placing it under OCFI supervision while requiring adherence to U.S. federal statutes such as the Bank Secrecy Act and the PATRIOT Act. This regulatory structure enables the institution to deliver financial services within a controlled, compliance-intensive environment.
Support for Consumer Lending Infrastructure: At launch, the bank will focus on strengthening the company’s existing FinTech-bank partnership model by providing underwriting, compliance, and customer servicing functions for consumer lending programs. This positions the entity to act as a core servicing and operational hub for current and prospective financial partners.
Scope for Future Product Expansion: The IFE license creates optionality for future diversification into traditional banking products, subject to separate regulatory approvals. The structure allows the institution to gradually broaden its service suite as operational and regulatory requirements are met.
Broader Market Reach Through IFE Framework: The IFE designation permits activity across U.S. and international markets. This expands the company’s geographic capabilities while maintaining alignment with U.S. regulatory oversight.
Operational Timeline and Management Structure: Propel Bank will be headquartered in Puerto Rico with a dedicated management team. The new entity is expected to be fully operational during the first half of 2026 and will use the company’s existing technology platform and operational infrastructure.
Regulatory Approval Following Multi-Year Preparatory Work: OCFI approval reflects a multi-year process in which the company built governance, compliance, and banking infrastructure to meet supervisory expectations. The authorization follows OCFI’s evaluation of operational readiness and the bank’s ability to operate as a regulated entity within the IFE framework.
Other Players in the Financial Institution & Banking Expansion Trend
Questrade Financial Group
Last month, Questrade also received regulatory approval from the Office of the Superintendent of Financial Institutions (OSFI) to establish Questbank, a Schedule I domestic bank in Canada, marking its formal entry into the country’s regulated banking sector. The company is expected to begin operations with a comprehensive range of banking services by early 2026.
Wealthsimple
Recently, Wealthsimple expanded its product lineup to include a chequing account with up to 2.75% interest, a no-fee credit card offering 2% cashback, and an upcoming instant line of credit with rates as low as 4.45%. These additions position the company closer to traditional banking offerings, though it operates through partnerships with Schedule I banks.
Banco Santander
Earlier this year, Banco Santander secured a Canadian banking licence for expansion. The Office of the Superintendent of Financial Institutions (OSFI) issued an order in March 2025 authorising Santander Consumer Bank to commence operations. Santander has maintained a presence in Canada for over a decade, initially entering the market through the acquisition of Carfinco Financial Group, a car-financing company.
KOHO Financial
Toronto-based KOHO raised $190 million CAD in debt and equity funding last year as part of its ongoing efforts to secure a Schedule I banking licence. KOHO currently offers savings, credit-building, and spending products in partnership with regulated institutions while working toward full regulatory approval to operate independently.
