The Office of the Comptroller of the Currency recently gave conditional approval to a national bank charter applicant that plans to offer traditional bank products and services exclusively through mobile, online, and phone-based channels. The bank, Varo Bank, N.A., will be headquartered in Salt Lake City, Utah, and will not have any branches or deposit-taking ATMs. The bank intends to have a nationwide footprint, however, based on its digital delivery system.
Importantly, while Varo Bank, N.A. essentially will be a FinTech bank, it will have a full-service national bank charter, rather than a special purpose bank charter. (Only full-service national banks may accept deposits.) In this regard, on July 31st, the OCC announced that it would begin accepting special purpose national bank charter applications from FinTech companies. The OCC has stated that it intends to support FinTech innovation through the chartering process. The Varo Bank, N.A. approval demonstrates the OCC’s commitment to this goal, and signals that future OCC approvals of bank charters – whether full-service or special purpose – involving pure FinTech plays should be expected.