Office of the Comptroller of the Currency Approves SoFi’s Bank Application

SoFi on 42nd Ave in New York City

The Office of the Comptroller of the Currency (OCC) has conditionally approved  SoFi’s (NASDAQ:SOFI) application to operate a bank.

According to the OCC, SoFi Bank National Association (SoFi Bank, N.A.), may operate as a full-service national bank headquartered in Cottonwood Heights, Utah.

As part of the transaction, SoFi Bank, N.A. will acquire Golden Pacific Bank, NA, a national bank insured by the Federal Deposit Insurance Corporation. 

Acting Comptroller Michael J. Hsu, issued the following statement:

“Today’s decision brings SoFi, a large fintech, inside the federal bank regulatory perimeter, where it will be subject to comprehensive supervision and the full panoply of bank regulations, including the Community Reinvestment Act. This levels the playing field and will ensure that SoFi’s deposit and lending activities are conducted safely and soundly, including limiting the bank’s ability to engage in crypto-asset activities. This action is consistent with the comprehensive legal and policy review of pending licensing decisions I initiated last May, and our work with other federal and state regulators to develop a coordinated approach to modernizing the federal regulatory perimeter.  Like every other national bank we supervise, the OCC will require SoFi Bank, N. A., to be adequately capitalized, have strong risk management programs, policies and procedures in place, and provide fair treatment to its customers.”

Once the transaction is completed, SoFi Bank, N.A., is reported to have $5.3 billion in total assets and $718 million in capital at the end of the first year of operation and will continue to offer a range of local commercial-focused loan offerings and deposit products previously offered by Golden Pacific.

The bank will also provide a fully digital, mobile-first national lending platform for consumers across the country.

The conditions imposed require specific capital contributions, adherence to an Operating Agreement, and confirmation that the resulting bank will not engage in any crypto-asset activities or services.

In addition, the parent company of SoFi Bank, N.A., SoFi Technologies, has applied to the Federal Reserve to become a bank holding company and therefore subject to consolidated supervision.

SoFi announced the acquisition of Golden Pacific Bank in the spring of 2021. The move was designed to expedite the process of gaining a national bank charter. SoFi, a leading Fintech, has long sought to provide a broader portfolio of banking services. By operating as a chartered bank, SoFi should be able to lower certain costs while providing direct services that should make the firm more competitive while benefiting its users.

When SoFi announced the purchase of Golden Pacific, SoFi CEO Anthony Noto, stated: “We 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.”

While SoFi will operate a bank, it will not be able to offer crypto services currently offered by SoFi Technologies or any other crypto activities unless it receives prior approval from the OCC.

SoFi will now become one of a few Fintechs to operate a nationally chartered bank.

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