[Editor’s note: This is the second article (see first article here) in a special series we are publishing from Wharton...
First, we had Varo. Then came Square. More recently SoFi, then Figure, now Oportun is joining the party. Let’s not...
Leading fintech platform, SoFi, has applied for a national bank charter with the OCC; unlike back in 2017 when they...
Regulators and fintech leaders gathered in Washington DC yesterday to discuss the fintech chartering process and some of the biggest challenges...
Arthur Levitt, former Chairman of the Securities and Exchange Commission, says the recent scandal at SoFi has cost them approval of their special bank charter; he tells the FT, “So for a company as aggressive as SoFi, I think the chances of that happening were slim. Now they become almost impossible.” Source
It has been a busy first quarter of 2021 for SoFi. The new year kicked off with the announcement that...
Varo broke new ground as the first major fintech company to obtain a full banking license; now that they have...
OnDeck had some pretty interesting updates in their earnings release which took place earlier today. CEO Noah Breslow shared that...
The Independent Community Bankers of America have expressed concern about Square’s plans for a bank charter; they believe it would set a precedent for other tech companies like Amazon; According to Jacqueline Reses, Amazon and Facebook haven’t expressed interest in a banking license and they would have to be evaluated on their own merits; Square also recently met with the National Community Reinvestment Coalition to address concerns with the Community Reinvestment Act. Source
Mobile-focused digital banking provider Varo Money has applied for a banking charter with the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), as chartering options continue to be debated for US fintech companies. Varo Money is the second fintech company to apply for bank chartering following SoFi who currently has an application pending with the FDIC.
Varo Money has applied for two approvals, one a national banking charter with the OCC and the second an application for deposit insurance with the FDIC. According to the Wall Street Journal, approvals would allow the company to take deposits, pay interest, make loans in any state and issue cards, all independently.
Details of the firm's applications have not been released publicly and it's likely to be a slow process for approval with the OCC who is currently being sued over offering a national banking charter for fintechs. The FDIC process also includes an open comment period which has been challenging for SoFi. Varo Money does have a significant investment from Warburg Pincus which also includes support from former US Treasury Secretary Timothy Geithner, who is the firm's president.