Varo Money has become the first US consumer fintech firm to be granted a national bank charter, enabling the digital challenger to offer a full suite of FDIC-insured services.
The San Francisco-based outfit was granted the charter by the Office of the Comptroller of the Currency and has secured regulatory approvals from the FDIC and Federal Reserve to open Varo Bank N.A.
Co-founded by former Wells Fargo executive Colin Walsh, Varo Money - which last month closed a $241 million funding round - currently provides a range of savings, loans and account-based services through a relationship with The Bancorp Bank.
With the national charter now in hand, Varo Bank will expand its services to target a broader set of customer needs including access to credit, and additional savings products.
Says Walsh: "2020 has been challenging for many of us across the country and has highlighted, once again, how the traditional financial system is not meeting the needs of hardworking, everyday Americans. The ability to operate as a full-service national bank gives Varo more freedom to deliver the kind of innovation and allyship that many Americans have never had from their bank before."
Brian Brooks, Acting Comptroller for the Currency, adds: "Granting a national bank charter to Varo marks an evolution in banking and a new generation of banks, born from innovation and built on technology intended to empower consumers and businesses."
Varo may be the first fintech to score a charter but it seems unlikely to be the last with others - including Square and SoFi - closing in on bank licenses.