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SoFi gets green light to become a national bank

October 28, 2020

Via: Fortune
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The U.S. Office of the Comptroller of the Currency (OCC) has granted conditional approval to lending and fintech company SoFi to receive a national bank charter, a designation that will allow it to receive deposits and make loans on its own.

Currently, SoFi licenses the charter from another bank to provide the legal backstop for its operation—a model used by many so-called challenger banks such as Chime, but one that undercuts its profits.

The process of obtaining a national bank charter is slow and costly, but is one to which other financial upstarts are turning. Online bank Varo received one in August while payment giant Square is in the process of obtaining one too.

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