On July 31, the U.S. Office of the Comptroller of the Currency granted Varo Money a national bank charter. This makes Varo the first FinTech to receive a national bank charter from the OCC. In an interview about Varo, Brian Brooks, the Acting Comptroller of the OCC, called the granting of Varo's charter a "come on in, the water's fine" moment for Fintechs.
FinTechs are starting to line up to take the plunge, but are having a hard time weighing the advantages and disadvantages. As Jeff Alberts, co-head of the FinTech Group, discusses in the video below, there are numerous benefits to getting a bank charter, including:
- Avoiding duplicative state regulation
- direct access to payment systems
- Funding through FDIC-insured deposits
- Access to wholesale funding
If you are interested in learning more about the benefits and challenges of obtaining a bank charter, check out the video.
Originally published August 12, 2020.
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