Personal finance and lending fintech SoFi obtained a green light from Office of the Comptroller of the Currency (OCC) for its bank charter application three months after applying.

Why should we care?
SoFi’s preliminary approval from the OCC marks one of the final stages of the chartering process (it still needs sign-offs from the Fed and the FDIC). This comes barely three months after banking startup Varo successfully obtained a national bank charter. In its application, SoFi said a charter would allow it to pursue an “originate and hold” instead of an “originate and sell” model. The charter would allow SoFi to hold deposits and lend without relying on partners, which could improve their operating margins. Industry watchers say SoFi’s progress in obtaining a charter means regulators are increasingly open to digital-only banking propositions, though it may not be the best path for all fintechs. “Now that the OCC and the FDIC have signaled that they will approve these [charters], then the cost of entry is lowered,” Thomas Hoenig, a former vice chairman of the FDIC, told FinLedger.