Mobile banking company Varo Money, Inc. today announced a significant step in its application process for a national bank charter, with approval from the Federal Deposit Insurance Corporation (FDIC) for deposit insurance.
The Office of the Comptroller of the Currency first awarded Varo preliminary approval in September 2018. Now with FDIC insurance, Varo moves the charter process to the next and final step of the approval process. Varo’s progress with its charter application underscores a bigger shift in the banking industry toward technology-driven experiences as well as a renewed regulatory commitment toward financial inclusion.
“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,” said Colin Walsh, CEO of Varo Money. “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 positively impact the lives of everyday people around the country.”
Since launching in July 2017, Varo has become a highly rated mobile banking brand with a mission to expand financial inclusion and help people stretch their money with bank accounts that have no minimum balance requirement or monthly account fees. Varo customers can get paid up to two days early with direct deposit*, and the company’s No-Fee Overdraft feature allows qualified customers to overdraw their bank account up to $50** with no fees if they are running short before the next payday. Additionally, Varo offers fee-free ATM withdrawals with its network of more than 55,000 Allpoint® ATMs worldwide.
Varo also delivers easier ways to save, with one of the highest Annual Percentage Yields (APYs) on the market and its Save Your Change program, which automatically rounds up purchases to the nearest dollar and deposits that money directly into a personal savings account.
“We should not underestimate how significant this is for the banking industry as it’s the first time a mobile-centric company is poised to be a chartered bank in the United States. Getting through this very high regulatory hurdle now opens the door for Varo to become the biggest mobile-centric national bank,” said Jo Ann Barefoot, CEO of Barefoot Innovation Group and formerly deputy comptroller of the OCC. “It also opens the door to enabling tens of millions of Americans who have been underserved to gain access to affordable FDIC-insured banking, which will build financial health and security for individuals and communities.”
Varo Bank is on track to obtain its final national bank charter pending completion of organizational requirements and meeting the conditions of both the OCC's and FDIC's Federal Reserve membership. Upon full charter approval, Varo plans to expand to additional types of services including credit cards, loans, and additional savings products.