Fintech startup SoFi gets preliminary approval for U.S. bank charter
LONDON (Reuters) – Financial technology company Social Finance Inc has received preliminary, conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) over its application for a national bank charter, the company said on Wednesday.
The application for “SoFi Bank, National Association”, which was filed in July, still needs to be reviewed by the Federal Deposit Insurance Corporation and the Federal Reserve.
A banking licence would enable SoFi to hold customer deposits and make loans, without having to rely on a bank partner as it currently does.
“SoFi is on a mission to help consumers get their money right all in one app,” chief executive Anthony Noto said in a statement. “This preliminary conditional approval from the OCC is a testament to the mission-driven company we have built, the employees who help it grow, and the over 1.5 million members we currently serve.”
SoFi, one of the most well-funded financial technology companies in the United States, rose to prominence after the Great Recession by refinancing at cheaper rates student loans for promising graduates.
Like many of its fintech competitors, the San Francisco-based company has been broadening the types of financial products it offers to “members” including stock trading and cash management accounts.
The company had previously filed for a bank licence in 2017, but withdrew the application that same year after the departure of senior executives, including co-founder and former CEO Mike Cagney.
The licence would make SoFi the latest fintech to secure a bank charter. Earlier this year the FDIC approved a banking charter for Square Inc SQ.N the payments company founded and led by Twitter Inc TWTR.N Chief Executive Jack Dorsey.
Reporting by Anna Irrera; Editing by Mark Potter