SoFi buys bank to speed up bank charter journey

In an apparent move to secure a bank charter as soon as possible fintech SoFi acquired California’s Golden Pacific Bancorp for $22.3M. SoFi offers banking, lending, and investing products.

Why should we care?
This isn’t SoFi’s first attempt to gain a bank charter. In July, it applied for a bank charter, receiving preliminary approval from the Office of the Comptroller of the Currency in October. A banking license would allow SoFi to hold customer deposits and lend without having to rely on a partner and providing it with a source of reliable, low-cost funding. This may help the company build a competitive advantage compared to startups that rely on bank partnerships. The acquisition will allow SoFi to switch from a new charter application to a change of control application, speeding up the timing of a charter. The company plans to keep Golden Pacific operating as a division of SoFI bank. The company announced in January that it will go public by merging with a special-purpose acquisition company. “We are thrilled to have found a partner in Golden Pacific Bank to both accelerate our pursuit to establish a national bank subsidiary, as well as begin to expand our offerings in SoFi’s financial products and Galileo’s technology platform to serve local communities,” SoFi CEO Anthony Noto said.