SAN FRANCISCO–Social Finance, Inc. (SoFi), the online student finance lender, said it is withdrawing its application for a bank charter following departure of several senior executives, including co-founder and former CEO Mike Cagney.
In June, the company had applied with state regulators in Utah for a bank charter and with the FDIC for deposit insurance so that it could offer deposit accounts.
“A bank charter remains an attractive option when the time is right. This decision does not change our plans to make deposit accounts available through partner banks in the near future,” a SoFi spokesperson said.
SoFi has been among the fintechs credit unions have been giving much attention, and predictions that fintechs would eventually push into the financial services space more formally by seeking bank charters has long been made.
In SoFi’s case, the bank charter had been a priority of former CEO Cagney’s effort to have SoFi compete with more traditional banks.
Following its most recent funding round, SoFi was valued at more than $4 billion. SoFi launched in 2011 offering student loan refinancing, and has since expanded into mortgages, personal loans and wealth management.
Cagney and other senior executives departed following lawsuits alleging sexual harassment within the company.