July 9, 2020 / 5:17 PM / a month ago

Student lender SoFi applies for a bank charter

NEW YORK (Reuters) - Student lender Social Finance Inc has applied for a national bank charter with the U.S. Office of the Comptroller of the Currency, the company said on Thursday.

A banking license would enable the company to hold customer deposits and make loans, without having to rely on a bank partner as it currently does.

“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,” said SoFi Chief Executive Anthony Noto.

The application for “SoFi Bank, National Association”, will be reviewed by the OCC, the Federal Reserve and the Federal Deposit Insurance Corporation, a spokeswoman said in a statement.

SoFi, one of the most well-funded financial technology companies in the United States, grew fast after the Great Recession by refinancing at cheaper rates student loans for strapped-but-promising graduates.

The San Francisco-based company has since been expanding its offering to its “members” beyond lending to include products such as a cash management account and stock trading.

The company had previously filed for a bank license in 2017, but withdrew the application that same year following the departure of senior executives, including co-founder and former CEO Mike Cagney.

The move, first reported by Business Insider, would make SoFi the latest fintech startup to apply for a bank charter.

The FDIC in March approved a banking charter for Square Inc, the payments company founded and led by Twitter Inc Chief Executive Jack Dorsey.

Reporting by Anna Irrera; Editing by David Gregorio

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