Digital banking platform SoFi is leaving the ranks of its challenger banking competitors to become a fully fledged bank. The California-based fintech announced today it has received approval from the U.S. Office of the Comptroller of the Currency (OCC) and the Federal Reserve to become a bank holding company.
SoFi CEO Anthony Noto called today’s regulatory approval an “incredible milestone,” adding, “With a national bank charter, not only will we be able to lend at even more competitive interest rates and provide our members with high-yielding interest in checking and savings, it will also enhance our financial products and services to ensure they efficiently meet the needs of our members, business partners, and communities across the country, while continuing to uphold a high bar of regulatory standards and compliance. This important step allows us to add to our broad suite of financial products and services to better be there for our members during the major financial moments in their lives and all of the moments in between.”
The approval comes with one contingency. The OCC said that SoFi Bank may not engage in any crypto-asset activities or services. SoFi currently offers a crypto wallet and trading platform, but as it is held under SoFi Digital Assets, LLC, the OCC’s contingency shouldn’t be an issue.
This approval comes in the wake of SoFi’s proposed acquisition of Golden Pacific Bancorp, a Sacramento, California-based bank holding company with consolidated assets of $150 million. The deal, originally announced in March of last year, is set to close next month for $22.3 million.
After the acquisition closes, SoFi plans to maintain Golden Pacific’s community bank business and footprint, including its three physical branches. Additionally, SoFi will help Golden Pacific pursue its national, digital business plan by contributing $750 million in capital.
As with most digital banks, SoFi relied on partnerships with traditional banks to hold deposits, issue loans, and provide FDIC insurance. Until next month’s acquisition closes, SoFi’s partner banks include Bank United, National Association; MetaBank Sioux Falls, SD; HSBC Bank USA, National Association; EagleBank, Bethesda, MD; East West Bank, Pasadena, CA; TriState Bank Capital Bank, Pittsburgh, PA; and Wells Fargo Bank, N.A, Sioux Falls, SD.
SoFi Technologies will continue to be traded on the NASDAQ under the ticker SoFi, but it will become the parent company of SoFi Bank, National Association. SoFi was founded in 2011 and has a current market capitalization of $11.4 billion. The fintech went public last year after a SPAC merger with Social Capital Hedosophia Holdings V.
Source: https://finovate.com/if-you-cant-beat-them-join-them-sofi-earns-bank-charter/
