New Fintech Bank Charter Opportunities with Michele Alt from Klaros Group

In this episode of FinTech Layer Cake, host Reggie Young speaks with Michele Alt, Co-Founder of Klaros Group, about new opportunities in fintech bank charters.

They unpack the recent SmartBiz approval, what it signals for the industry, and the realities of the charter process—from regulatory hurdles to risk management. Michele also shares why now might be the best time in years to act—and why ILC charters could be the next big thing.

If you're thinking about chartering, partnering, or future-proofing your fintech, this episode is a must-listen.

Transcript

New Fintech Bank Charter Opportunities with Michele Alt from Klaros Group

Reggie Young:
Welcome back to Fintech Layer Cake, where we uncover secret recipes and practical insights from fintech leaders and experts. I'm your host, Reggie Young, Chief of Staff at Lithic. On today's episode, I chat with Michele Alt from Klaros. Klaros is a financial services advisory and investment firm. They help innovators and incumbents build the future of financial services. If you've ever seen an enlightening chart about fintech sponsor banking on LinkedIn, it probably came from Klaros.

Michele is an expert in so much, but I wanted to get her on the podcast because Klaros recently played a key role in helping the fintech SMB lender SmartBiz obtain an OCC bank charter. I'm personally really excited about the opportunities fintechs will have in the next few years when it comes to bank charters, but surprise, it's complicated and there's no better person to talk about it with than Michele. We cover the ins and outs of fintech bank charters, including the biggest pros and cons, when it makes sense for a fintech to go after a charter, what it practically requires, and much more.

Fintech Layer Cake is powered by the card issuing platform Lithic. We provide financial infrastructure that enables teams to build better payments products for consumers and businesses. Nothing in this podcast should be construed as legal or financial advice.

Michele, excited for our conversation today. As you and I were just talking before I hit record, I'm a big fan of Klaros, a lot of great folks over there. You all are working on some pretty exciting things, including the recent SmartBiz bank charter news. That initially triggered me to reach out because you're one of the, I think, foremost experts on fintech bank charters right now in this space. You're one of the best people to talk to about all the opportunities for fintechs and bank charters. Maybe a good place to start is with that SmartBiz news. What happened, and why should folks at fintech be so excited about it?

Michele Alt:
Okay, but first, Reggie, I'm delighted to be here. Thanks for having me. I'm sorry I triggered you, but...

Reggie Young:
In a good way.

Michele Alt:
In a good way. Oh, it's so exciting, Reggie. SmartBiz, which is once a small business lending marketplace, just completed and received regulatory approval from both the OCC and the Fed to acquire Centrust Bank and its holding company. And so now SmartBiz is SmartBiz National Association. That's extremely exciting because SmartBiz is the first fintech approval since, by my count, 2021. It was a long period of inactivity under the Biden administration, and this is an absolute signal that the regulators are back and open for business in terms of new bank formation.

Reggie Young:
Yeah, definitely. You mentioned, okay, four-ish years ago since the last charter, but it's not like they happen consistently every four years. There's kind of been a dearth and slowdown of this charter generally for a while.

Michele Alt:
Yeah. New bank formation has slowed significantly over the last 10 years or so, and there are a number of reasons for that. The Fed has studied this. One of the reasons is the expense and burden associated with the application process. Certainly, I have seen that up close. It is expensive and unnecessarily burdensome and opaque. So bank formation slowed down significantly. And then in terms of innovative bank formation, it utterly stalled during the Biden administration, and that is just unacceptable for the good of American consumers and for competition.

Reggie Young:
One of the things that stood out to me in the release, too, is the OCC specifically put out a release that called it a fintech charter, which I thought was really interesting to see an actual OCC headline, a news release that said, this is a fintech-specific bank charter. I think it's pretty subtle, but notable.

Michele Alt:
It is notable. And I promised, Reggie, I wouldn't get into the weeds, but now I'm getting into the weeds. One thing I'd like to emphasize is SmartBiz is a fintech that received approval for a full-service national bank acquisition. This is not a specialized charter, it is not a fintech charter, as people understood that to be in 2016 when it was proposed and died a global death.

Reggie Young:
Yeah. It's a good point. It's a very high bar. This isn't a limited-purpose charter of any sort. So if we see moving on the highest possible bank charter bar you could reach, that's a good sign for everything else.

Michele Alt:
Exactly. There were no shortcuts here. SmartBiz fully ran headlong into a very complex and highly scrutinized application process and business model, and hats off to them.

Reggie Young:
You mentioned the burdensome process. I'd love to double-click on that for a second. What does that process look like at a high level? What are some of the components, and how long does it take? I imagine the answer is it depends. Given your comment about it's a pretty opaque process, probably really hard to say, ah, yes, it typically takes X or Y months, but I'm curious to just generally double-click on that process.

Michele Alt:
Yeah, sure. I'll do my best. To apply for a bank, really of any type in the US other than special-purpose charters that are offered by some states, but a bank charter application follows the same requirements that are set forth in the interagency bank charter. Bank applicant submits a bank application pursuant to interagency guidelines. The meat of that application is a very comprehensive business plan. Preparing the business plan and the application is a big lift.

An official at the FDIC once told me, and I thought this was a really good visual, when you're thinking of applying for a bank, think copy paper boxes, not binders. Back in the day before e-filing, you would literally deliver thousands of pages of documentation to demonstrate the soundness and the likelihood of success of a business plan submitted in connection with the application. So it is a big lift.
Once that is submitted, the agencies have differing processes and differing timelines for reviewing. Let's just take as a hypothetical a national bank with a holding company, and let's talk about that as an application that is de novo. To build the bank, the applicant will deal with three different regulators. The OCC in the first instance, which is the chartering authority for national banks, the FDIC in connection with its application for deposit insurance, and then finally, the Fed in connection with the formation of a holding company. If those processes are sequential according to the published review timelines of the agencies, that can take more than a year, and it typically does. It is a lengthy process.

Reggie Young:
Is there a lot of back and forth to the process? Is it you submit the first virtual boxes of documents and then they come back with questions? There's a lot of back and forth there?

Michele Alt:
Oh, it's a highly engaged process between the applicant and the regulatory agencies, as it should be, as the agencies get their arms around the business model and the organizers. The chartering agency reviews a business plan to determine whether it has a reasonable likelihood of success and whether the organizers have the ability to execute on that business plan. That is, again, a highly iterative process to determine. The agency will drill down on the financial projections in the business plan, the risk management program, the marketing plan, the competitive analysis, etc. They will be doing that by reviewing documents and also interviewing and discussing with the organizers and the proposed management team. So it is highly iterative.

Reggie Young:
It's an interesting frame because I've heard that those two checkboxes of likelihood of success and qualifications of team, that's the same thing that effectively sponsor banks look for when they're partnering with fintechs like that. It kind of flows all the way down. So it makes sense.

Michele Alt:
Well, Reggie, you raise a good point there because quite frequently, in the fintech world, an applicant for a bank charter is typically already engaged in offering financial services through a bank partner. Much of the work that that fintech will have done to be onboarded and to meet the standards of its bank partner will- at least the basis for the business plan and certainly the risk management program described in the business plan.

Reggie Young:
Yeah. There's a lot of places in fintech you need to provide diligence to partners. But I think once you go through that pain once, then you have all the stuff ready, and people don't often think about how easy it is to reach back and pull that stuff again for all the other use cases that you may not think about it coming up. So it makes sense.

Michele Alt:
Reggie, I know you're the interviewer, but I'm bossy pants here. One of the things I'd love to get across, though, is, and I never sugarcoat it, despite how difficult the process is, there is movement afoot and reason to be optimistic, not just because SmartBiz was approved, not just because I think it's a whole new day and we'll see more approvals. A number of prominent practitioners in this space recently published an open letter to the banking agencies on ways that the process could be enhanced and simplified in order to make it more efficient, transparent, and fair to applicants.

I'm pleased to say I've had discussions with top agency leadership at all three agencies and all three federal agencies, and they are very receptive. There was also a very interesting development yesterday on the Hill about this that I'd like to mention. Yesterday, Chairman French Hill of the House Financial Services Committee and his Republican members of that committee sent a letter to acting FDIC chair, Travis Hill, outlining a number of regulations that the committee thinks should be revised or rescinded. Among those are the FDIC's rules on parents of ILCs.

Reggie Young:
Interesting.

Michele Alt:
Very interesting development there. We can take this conversation any way you'd like, Reggie, but there's a lot of reason to be optimistic both about fintech bank charter approvability and the improvements to the process itself.

Reggie Young:
Yeah, I would love to double-click on that a little bit. This gets at one of the questions I wanted to chat about with you. How is the process going to change? You can answer that with respect to some of the topics you covered in the open letter, or just generally what kind of regulatory changes you expect over the coming years?

Michele Alt:
Okay, let's focus on one in particular, one change that needs to happen. When I was describing the published review periods that the agencies have, I left out that those periods can be gamed by the regulators, and have been for years, and definitely during the Biden administration. The chief way they can be gamed is that, for example, the FDIC promises to review an application in 120 days once the application is substantially complete. Who decides substantial completeness? The FDIC. During the Biden administration, frankly, the FDIC was notorious for kind of endless churn and not making it to the substantial complete, so not even allowing that clock to be triggered. There have been legislative calls to mandate that 120-day clock, but what they need to do is eliminate that substantial completeness, discretion, and publish a precise list of, this is what complete looks like. That is something I'm pushing hard on.

Reggie Young:
Yeah, it makes a lot of sense. To our conversation topic earlier, there's a lot of back and forth in the process, and I'm sure regulators can just keep asking more and more and more questions and say it's not complete and then just follow up with potentially trifle things to ask on and just keep kicking the can down the road. So it makes a lot sense.

Michele Alt:
Yeah. There's a couple other things that are important here besides the substantial completeness. I would call it loophole. The regulators have really differing review processes. When I describe the chartering agency as essentially just deciding whether the business plan has a reasonable chance of success and the appropriate organizers, that is the first step that the OCC uses.

And the second, so if they say yes to both those questions, yes, reasonable chance of success, the organizers can execute on this, the OCC will grant conditional approval. After that comes the building of the bank, building the bank to conditions. What has happened in recent years is, essentially, the FDIC has required the bank to be built before deeming the application substantially complete, requiring incredible resources to be expended without even a clear indication that they are likely to be approved. So really almost impossible bar being set up.

That needs to change, too. All the agencies need to sing from the same hymnal and have this sort of two-step process. And the FDIC should be determining the insurance question, granting of deposit insurance instead of relitigating the chartering agency's decision. That's one thing that I think is really important.

And the agencies need to also get singing from the same hymnal in terms of what does success look like. Is it a reasonable chance of success, or absolutely no risk of failure? During the Biden administration, it was really the latter. Banks are inherently risky. They lend money. There's a risk in that. But they need to take that risk for the benefit of their customers and the broader economy. So approaching bank applications with absolutely no tolerance for failure is risk aversion rather than risk management. And banking needs to be characterized by risk management.

Reggie Young:
I'm thinking of Patrick McKenzie. I forget what the book is that it's originally from, but Patrick McKenzie has in the past written a lot about the concept that the optimal amount of fraud is not zero, because if you have zero fraud, you're not in business because there will always be fraud. You can't have a financial system if you want zero. You want zero loan losses, you'll never provide a single loan to any small business that needs it.

Michele Alt:
Right, exactly. And so if you want zero, zero, zero risk, you want banks to be public utilities. And I don't think anybody wants that.

Reggie Young:
Yeah. You opened up the perfect segue for another topic I wanted to cover around just the practical stuff that a fintech needs to build. Hopefully, they don't need to build it all for day one of their approval, but it's not just as simple as turning in documents to the regulators and getting approval. There's a lot of actual, I imagine, personnel hiring. I'm curious, from your experience, what are some of those big pillars that fintechs may not be thinking about? If they're like, ah, yes, I'll go get a bank charter that'll cut down my bank sponsor costs, they may not be thinking about some of the operational considerations.

Michele Alt:
Right. Building a bank is a big thing. You do need to hire appropriate leadership and staff. You need to have appropriate infrastructure and the core processor. That's an issue that fintechs tend to be very confident about, but there's a little bit of a culture and technology clash there where existing bank technology is pretty clunky. But it's known to the regulators and they're comfortable with it, and they examine those systems. So there's a bit of marrying the advanced technology that many fintechs bring with some of those clunky technologies. And that's, as you can imagine, a project.

And then there's developing- I keep mentioning risk management programs because they're so important, is really building out the policies, the procedures, the reporting, etc. Of course, as I said before, they can leverage much of the work they've done with connection to onboarding with bank partners, but running your own bank is a whole other thing.

Reggie Young:
One of the other topics I want to talk about is it's not all sunshine and rainbows getting a charter, right? There are some downsides. I think a lot of folks I talk to in fintech have this idea of like, oh yeah, I hinted at, we'll just get a charter and then our bank sponsor costs will go way down. It'll be relatively simple. Obviously not. I think there's some situations where it makes more sense for a type of fintech or business model to get a charter versus not. But I'm curious for your take on what are some of the big pros and cons if a fintech is considering getting a bank charter? Obviously, they should go engage with Klaros to help them navigate all this stuff. But I'm curious, at a high level, what some of the top pros and cons are that folks may not think about.

Michele Alt:
Okay. Well, let's go through the pros. First, low-cost funding in the form of insured deposits. Unit economics, no longer sharing those revenues with your bank partner. Direct access to the federal payment rails, and membership in the federal reserve that is sought, the ability to be members of Visa and Mastercard in the US. Those are pretty big benefits. And then I'm going to go to the cons, and then I'm going to come back to the biggest benefit, to the biggest pro there.

The cons are a much higher level of intrusion of regulatory oversight. Being directly regulated is no joke. And that's kind of a culture clash for a lot of fintechs. The fintech valuation versus a bank's valuation can be different. And we could have a whole nother discussion about this. But suffice it to say, it's not an apples-to-apples comparison because of the difference in the way fintechs are valued versus banks and how things have changed since the heady era of the SPAC days a few years ago that drove some fintech valuations. But there is definitely that issue. There is just the cost of building all of those systems necessary to run a bank.

Okay. So that's kind of the bad news, but let's circle back to the main pro of getting a bank charter, is getting a bank charter future-proof your business. As we saw during the Biden administration, there was a lot of pressure on Banking-as-a-Service. When there is pressure on partner banks, what follows is pressure on the fintechs. The problem that fintechs have is they do not have a direct supervisory relationship with the regulators and are necessarily, because of confidential supervisory information restrictions, they are necessarily in the dark about regulatory situations that can put them at existential risk to their business. If you suddenly get off-boarded, if you suddenly have limits on your ability to run your program, onboard new partners, grow, that's a problem.

Reggie Young:
Yeah, that is a huge pro. In law school, you end up in these philosophical debates in a lot of business class about the agent problem of how do you have an agent that's going to advocate for you? And I think it applies in the fintech bank sponsorship space in both ways, where the bank sponsor is trusting the fintech to be a good agent. They're providing oversight, making sure that that fintech partner is, but it also flows the other way. The fintech is kind of relying on the bank to be a good agent that advocates for them. And to your point, they may have no idea because of the confidentiality restrictions with regulators.

Michele Alt:
Right. And I love that you mentioned law school theoretical discussions. I, too, am a lawyer. I'm familiar with those kind of tedious, let's chuck it all around on the one hand, on the other hand, on the one hand, on the other hand. I have talked to clients in the past, and they raised their worries about the cons. Again, I don't sugarcoat them, but I often say, you should be so lucky to have those cons on your business.

Reggie Young:
Good problems to have.

Michele Alt:
Good problems to have. I am telling everyone who calls me, and boy, am I getting a lot of calls now, is the window is open. Act if you've been wanting to act. Act now before it slams shut again.

Reggie Young:
Yeah. If folks take one thing away from this podcast, I think that's right. That's what I'm thinking about a lot. I was like, what are the creative opportunities? Again, you want to do everything safely. You don’t want to push regulations and laws that you need to comply by, but this is an opportunity to push innovation forward, because to your point around some of the regulatory scrutiny, it kind of really raised the bar for innovators over the past several years. And I think now we're in the space where the space is a little more open for innovation.

Michele Alt:
Yeah. And one thing to keep in mind, too, it's not an all-or-nothing proposition. It's quite common for a fintech’s business plan for a bank to involve parallel tracks where the parent company or the affiliate of the proposed bank will continue to run some business through a bank partner, eventually transitioning over to the bank or continuing to offer some types of products outside of the bank so that they can innovate and grow and move more agilely than they may be able to with a bank. So that's an important thing to keep in mind.

The other thing I want to mention, as much of a cheerleader as I am coming across for new bank formation, it really isn't for everyone. It is hard and it is expensive. It really makes sense only for pretty well-scaled fintechs with very mature programs and significant capital to deploy.

Reggie Young:
Yeah. Are there other factors? That makes sense to me. That's probably the biggest North Star for when it makes sense, like do you have the money to invest in building out the practical operations to meet all the needs you need to as a bank. But I'm curious if you see other factors around certain types of fintechs, certain industries, or anything else.

Michele Alt:
Again, it's a new day. I would have absolutely said during the Biden administration, oh, be careful on the blockchain stuff. And forget about models that serve subprime. That is probably one of the most misunderstood segments in lending. To lend to high-risk borrowers, low-income borrowers, to make that work, it often involves higher interest rates than many advocates would prefer, but it's an economic reality. The kinds of conversations that happened during the Biden administration around potential applicants that do serve those communities was very discouraging. And it ignored the fact that there are responsible lenders in that space, and the alternatives to them are grim, highly expensive and bad for consumers. I think there is absolutely receptivity to blockchain now, obviously, and digital asset models. And I am hoping for a little bit more of an informed discussion around subprime.

Reggie Young:
Yeah, that's really interesting. I've, at one point, dug into true lender issues, some of the interest rate considerations. There is this easy concept of, let's put caps on interest rates and it will protect people. In reality, no, those people just don't get the credit and they go to worse opportunities. I think interest rates is a false proxy for bad actors. It's more like, are you doing consumer harm to the end users? Interest rate becomes a proxy for it, but it's a very imperfect proxy.

Michele Alt:
Right. It's very imperfect, especially because of the way APRs are calculated. A short-term loan might look astonishing from an APR point of view, but on a dollar basis, it might be pretty modest, and again, much better than going to the pawn shop, the payday lender, those kinds of alternatives. It's naive to think, oh, this borrower should just go to JPMC and get a 12% line of credit. That's not going to happen.

Reggie Young:
Yep. I have to ask about your time at the OCC, the regulatory nerd in me has to. You spent over two decades there, including working on some of the interagency rulemakings that stem from the Dodd-Frank Act. I'd love to chat about that experience. What was the rulemaking experience like? Did you pick up any major insights or lessons on how regulations are shaped or how policy is made in financial services from that experience?

Michele Alt:
Well, if I didn't, that would have been a real waste of time. Yes. That was one of my all-time favorite gigs, is doing interagency rulemaking taught me to be extremely patient, which serves me well in the licensing arena, and to also absolutely make it my business to learn and understand the policy perspectives, the other agencies, and what looks like a win to them. Negotiating really high-profile Dodd-Frank rules was fun and maddening, but each agency has its own perspective, has its own jurisdictional limitations. And so these can be very complicated to knit together. And again, I learned patience. I learned to figure out what is a win, how to meet the unwritten policy goals of each agency. Those lessons are invaluable as I'm representing clients in the [inaudible] context.

Reggie Young:
I love it. It's funny, I was thinking about like you see in Europe, government coalitions forming where each has a kind of overlapping- it's a Venn diagram of interests and everybody has to come together to figure out what they actually have common ground on.

Michele Alt:
Yeah, it absolutely is like that.

Reggie Young:
What would be some examples of that- I'm particularly interested in the concept of different regulators have different definitions of what a win looks like. What might be some examples of that?

Michele Alt:
Well, this one might seem random, but I wish I could get the years of my life I spent on this one back, but the incentive compensation rules. The Dodd-Frank Act required six different agencies to coordinate on rules around incentive compensation at their respective institutions. So we had the SEC. We had the FHFA. We had the banking agencies. It was complicated.

And those agencies have different perspectives. Just a random example, the FHFA have their own rules for their executives. We're necessarily very concerned that this process not impact their framework. The SEC, it's not a supervisory agency, it often learns through enforcement. And so there was a little bit of an information gathering issue there. The banking agencies examine, they have a wealth of data at their hands about subject institutions, that was different.

The Fed was kind of the top dog because compensation in banks is typically set at the holding company level. And so they had a lot of information. They had worked on this for many years. They had a decided point of view. The FDIC at this time, and I'm talking starting in 2010, and spoiler alert, those rules were never finalized. And it wasn't my fault, so don't blame me. But the FDIC at that time, their leadership had a decided view on appropriate incentive compensation vehicles that was at odds with some of the other agencies. So that's just an example, very, very different. I probably should have used a failed rule as an example.

Reggie Young:
No, it's complicated. I think the fact the rule hasn't been finalized is a good example of, it's hard. There's so many cats to herd that you may not be able to get across the finish line.

Michele Alt:
Yeah, that one is an example of maybe it's best not to put so many cooks in the kitchen.

Reggie Young:
Yep. Super high level opening a question, I'm curious how you spent time at the OCC. Now you're working with companies, applying for charters and whatnot, I'm sure interacting with the OCC externally. I'm curious how you've seen the OCC change over the past several decades. Are there one or two or three big changes that come to mind?

Michele Alt:
There are always basically two agencies, the staff-level agency, in which turnover is low, and then there's the leadership, which changes with administrations. The biggest change I have seen since my departure, because I used to say- people would ask me at home, outside of the beltway, gee, what's it like now that so-and-so is the president? And I would always say, it's the same. The business of the agency remains the same.

What has changed over, I would say, the last eight years or so, 12 years, is that there are much more distinct swings in policy based on administration. I think the agencies are more politically sensitive than they used to be. Maybe call me naive, or Pollyannish, or rose-colored glasses wearing, when I look back at my time at the agencies, but I think that's a pretty common view among the staff-level agencies, that it has changed.

Reggie Young:
Yeah, that's interesting. I hadn't thought about that. But from the outside, it definitely seems like they've become decently politicized institutions.

Michele Alt:
Yes.

Reggie Young:
A few quick wrap-up questions. My favorite one is, what's something that you've been thinking about a lot lately, but you think folks in fintech are not talking about enough?

Michele Alt:
Okay, this is what I'm thinking a lot about, is industrial loan company charters for big tech. I think that is probably the most interesting issue out there. Nobody in big tech land has yet filed, but I expect we'll see that, and going in the weeds.

Reggie Young:
Let's do it.

Michele Alt:
ILCs have long been a controversial charter choice and a rare, rare bird. There are only 26 in the US currently out of more than 4,000 banks. These are very unusual, but they are also historic. Industrial loan companies have been around more than 100 years in their current form for more than 40.

And the reason they are so sought after, consider those the holy grail for fintech, is that the parent company is not subject to supervision by the Federal Reserve. That is of necessity. Industrial loan companies, typically, the parents are not engaged in the business of banking. They would not meet the standards to be considered a bank holding company. Examples are the auto companies. They build cars. That is not part of the business of banking. It is not financial in nature, but they certainly make loans.

That is what an ILC charter is intended to do, to allow industrial companies to provide credit and financial services to their customers and to their employees. And that exception from the Bank Holding Company Act dates to the 1980s. Opponents, and there are many, to the ILC charter describe that exemption from the Bank Holding Company Act as a loophole, as if it were an accidental oopsie on the part of Congress as opposed to a longstanding statutory construct.

And when you look at the opponents, when you hear the words close the ILC loophole, pay attention to who is using those words. Those words are being used by incumbent banks that are seeking the protection of the regulators from competition by ILCs. ILCs typically are very small and very specialized and actually don't really pose a big competitive threat to most incumbent banks. But where people just lost their shit- I was trying to think of a non-swear word.

Reggie Young:
It's fine.

Michele Alt:
I can't think of another way. Sorry. I grew up in Michigan and my husband always says, you can take the girl out of Flint, but you can't take the Flint out of the girl. So sorry. But where they lost their minds, that's it, they lost their minds was when Walmart applied for an ILC. That was a competitive threat. The incredible reach of Walmart, convenience of Walmart, the customer base of Walmart, that was a competitive threat. And that went down with just a fierce campaign against Walmart. Well, I don't think Walmart's going to go back into that ring. But what if a big tech company, and not saying they are going to do this, but what if Google decided to enter banking? Talk about reach. Talk about convenience.

Reggie Young:
Deep enough in the payment space that they would- yeah.

Michele Alt:
I know there's a lot of pearl clutching in this space, but when I see that letter from the House Financial Services yesterday, specifically targeting the FDIC's rule on parent companies of ILCs, I'm paying attention. And boy, do I think that the incumbent banks are going to get very active.

Reggie Young:
It should be interesting. I'll have my popcorn ready. I think you're right. It is a pretty underdiscussed topic right now, and it'll increasingly get more attention. But I think ILCs are a big underdiscussed opportunity in the next few years.

Michele Alt:
Elon Musk has been talking about wanting Twitter to be a bank. Obviously, I'm not inside Elon Musk's mind. I don't know if he actually means some sort of formal bank charter or just saying he wants to provide financial services in some way. But again, talk about reach.

It's the interesting dynamic I'm watching. Big tech obviously had a big role in the election, big dollars. And so we have interesting potential conflicts among traditional supporters of the Republican Party, like big incumbent banks and community banks, too, and then perhaps a bit of a debt that's owed to big tech here. So yeah, grab your popcorn.

Reggie Young:
Going to be an exciting few years for sure.

Michele Alt:
Yeah.

Reggie Young:
Awesome, Michele. This conversation has been wonderful. If folks want to find out more about your Klaros or get in touch, where should they go?

Michele Alt:
Okay. So my name is Michele spelled with one L. They can email me at michele@klarosgroup.com, and they can find me on LinkedIn.

Reggie Young:
Awesome. Well, thanks so much for coming on the podcast and enlightening me and our listeners on all the fun bank charter opportunities that are out there now.

Michele Alt:
Thanks for listening. And you're giving my husband a break, so he doesn't have to listen to me.

Reggie Young:
Love it. Awesome. Thank you so much.

Michele Alt:
Sure.