SoFi took another major step toward becoming a bank, filing an application for a new-bank charter.
According to an article in The Wall Street Journal by Peter Rudegeair, the online lender asked the Federal Deposit Insurance Corporation “to grant the company a banking license, one of the most advanced efforts by a financial-technology startup to obtain the power to offer bank products and services in exchange for stricter regulation.”
The article noted that the application was filed June 6 under the name of a Salt Lake City, Utah-based subsidiary called SoFi Bank.
This isn’t the first time SoFi has made a move to become a banking institution. Coming a long way from its foundation as a student refinance lender, SoFi announced back in February of this year that it acquired Zenbanx, a fintech mobile bank, marking its initial steps into the banking world.
The acquisition brought SoFi closer to becoming a bank, as it intended to leverage Zenbanx’s platform and underlying technology to expand SoFi’s growing suite of online personal finance offerings.
Currently, SoFi focuses on student loans, mortgages and personal loans, along with a handful of other offerings.
Ryan Lawler further expanded on the news in a Tech Crunch article and noted that the there will be an open comment period on the application for the next month, which will close July 6.
Lawler received a copy of the application and found:
The company is applying for an industrial loan charter under the name SoFi Bank in Utah, listing a Salt Lake City location as its proposed depositary address. However, the company makes clear in the application that SoFi Bank will operate as an online-only institution, with no branches or deposit-taking ATMs.
According to the filing, SoFi Bank is applying “for the purposes of providing its customers a FDIC insured NOW account and a credit card product. The bank will offer no other products and services.”
However, it won’t be an easy process. The article added that there hasn’t been any new industrial loan company charters approved in about a decade.