Varo Receives FDIC Approval for Bank Charter

| By:

VColin Walsh Varoaro Money, the company that has been providing customers with app-based banking since 2017, has just received approval from the FDIC to take deposits. Having been working towards this for the previous three years through various rounds of applications to the FDIC, Varo CEO Colin Walsh told CNBC that “it was a long process – for this to finally see daylight is a big deal for the industry.”

Fintechs such as Varo, like Revolut, N26, and Chime, rely on partnerships with banks to provide financial infrastructure in the absence of such FDIC approval. This decision is a first for the fintech space and it means that all accounts with Varo’s partner, Bancorp, will transfer to Varo in Q2 of 2020, so long as the company passes final regulatory tests.

Robinhood, a startup that offers options to invest in stock through its app, previously applied for the same charter but pulled out in November, while the payments titan Square has applied for a different charter for a specialized industrial loan company license.

“Receiving an official bank charter has been part of Varo’s vision from the very beginning, and we are excited to progress through the necessary steps to accomplishing that goal,” Walsh, who is a former American Express executive, said in a statement. “Despite historic economic growth, only 29% of Americans are considered financially healthy. Varo is committed to creating inclusive financial opportunities that deliver measurable benefits to all consumers. Becoming a fully chartered bank will give us greater opportunity to deliver products and services that impact the lives of everyday people around the country.”

Varo has stated that it has ambitions to provide additional services that are typical of banks, eg. credit cards, loans, saving products, but these are of course pending charter approval.

Last modified: February 12, 2020
Brendan Garrett

Category: Banking, Fintech

Home Banking, Fintech › Varo Receives FDIC Approval for Bank Charter

    Green Note Capital

    Smart Business Funding


    Highland Hill Capital

    Symplifi Capital

    Select Funding

    Dedicated Financial GBC

    Fresh Funding

    Unique Funding Solutions

    ROK Financial


    In Advance


    Fenix Capital Funding

    Velocity Capital Group

    Legend Funding

    Global Funding Experts

    Spartan Capital

    Accord Business Funding

    National Funding

    Total Merchant Resources

    Titan Asset Management

    AMA Recovery



    Meridian Leads

    Merchant Financing Leads