How Figure and Method closed the loop on debt consolidation and cut delinquency in half

Debt consolidation has always rested on a promise lenders couldn’t verify. A borrower takes out a HELOC, says they’ll pay off their credit cards, and the lender hands over the cash and hopes for the best. Credit bureau data lags by 30 days. There’s no mechanism to confirm the debt actually got retired. And a significant share of consolidation borrowers end up re-accumulating balances — leaving lenders with paper that performed worse than expected and borrowers worse off than before.

Figure and Method set out to close that loop. Figure is the largest non-bank HELOC originator in America, a public company on the Nasdaq running a two-sided capital marketplace on blockchain rails. Method is a financial connectivity API that gives lenders real-time access to a borrower’s full liability picture — and the ability to pay those liabilities off directly at the moment of funding. Together, they’ve built what they’re calling verified debt consolidation: a closed-loop system where the lender doesn’t hope the debt will be paid — they know it will be.

Today I’m joined by Mit Shah, co-founder and COO of Method, and Rod Albuyeh, who leads AI at Figure and is something of a boomerang — he was at Figure from 2020 to 2022, left, and returned in January to a company that had transformed around him. We talk about what the data actually shows, what happens when this capability travels across Figure’s 380 white-label partners, and whether verified debt consolidation is a premium feature or the future of the category.

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Top-line Takeaway: Debt consolidation has always depended on a leap of faith. A borrower takes out a loan, promises to pay off existing debt, and the lender has little way of knowing whether the debt was actually paid off. Figure and Method are trying to eliminate that uncertainty by turning debt consolidation into a closed-loop process, using real-time liability data and direct payoff capabilities to ensure debt is retired at origination rather than relying on borrowers to do so later. The result is materially better loan performance.

More broadly, this is a story about how better data and connectivity can expand credit access rather than simply reduce risk. With real-time visibility into liabilities, lenders can underwrite against current reality instead of stale bureau data, expanding credit access. If the early results hold, verified debt consolidation may evolve from a premium feature into a standard expectation, much as instant payments and digital onboarding did before it. Meanwhile, Figure’s transformation from a blockchain-powered lender into a marketplace infrastructure provider serving hundreds of partners highlights a larger trend: financial institutions increasingly win by becoming the rails others use to originate, fund, and distribute loans.

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The problem lenders couldn’t solve

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