Varo Money Inc., a mobile banking startup, recently announced it has applied for a national bank charter. Although Varo is technically a financial technology company, its application is not for the special charter for nonbanks, or fintechs, that has been proposed by the Office of the Comptroller of the Currency. Varo instead opted to apply for the traditional national bank charter through the OCC and the Federal Deposit Insurance Corp. - a step some attorneys view as a direct result of the OCC acting comptroller's July 19 speech to the Exchequer Club in Washington, D.C., that encouraged fintechs to act as banks.
In The National Law Journal article, "OCC Invitation Prompts Fintech to Apply for Traditional Bank Charter", RK&O partner Vincent Basulto discusses Varo's application, "In last week's speech, the acting comptroller was clear in expressing the willingness to consider less traditional applicants, I would see [Varo's] application as indicative of that." Basulto also said, "he's not anticipating a flood of application to pour into the OCC or FDIC as a result of the announcement."