SAN FRANCISCO–The fintech Social Finance, better known as SoFi, has filed an application for a national bank charter with the Office of the Comptroller of the Currency (OCC).
In an email sent to employees, CEO Anthony Noto said the personal finance startup “thought long and hard about embarking on this path, and is proud of what we have accomplished in the last two-plus years to position ourselves to take this next critical strategic step in our development.”
According to NCBC, if the charter is granted it would allow SoFI—whose business model is quite similar to that of credit unions–to operate under one set of federal regulations, rather than 50 different state regulations.
“In addition to unifying regulatory operations, the charter would allow SoFi to lend money and accept deposits independent of the partner banks it currently works with, as well as offer more competitive interest rates for its suite of loans, checking and savings offerings,” CNBC said
As CUToday.info reported earlier, in 2017 SoFi applied for a bank license in Utah with the FDIC under co-founder and former CEO Mike Cagney. But Cagney resigned later that year amid sexual harassment allegations made by two former SoFi employees. Following the departure of Cagney and other senior executives, the company withdrew its application later that year, CNBC said.
A SoFi spokeswoman confirmed to CNBC it has formally submitted an application to the OCC for a proposed de novo national bank, SoFi Bank, National Association.
Number of Accounts Doubles
The company chose the “de novo” path because it will allow SoFi to take insured consumer deposits. It is the first step in a process that, upon approval, would then be reviewed and need approval from the FDIC and Fed as well.
“We firmly believe that by pursuing a national bank charter, we will be able to help even more people get their money right with enhanced value and more products and services,” Noto said in a statement emailed to CNBC.
According to the report, SoFi has seen the number of its investor accounts double in 2020.