It looks like we could be seeing the launch of a PayPal Bank in the US after the company took advantage of looser conditions in order to make its application …
Even for a company the size of PayPal, becoming a bank is no trivial undertaking. However, the White House decided earlier this year to loosen the stringent conditions normally required in order to allow fintech companies to become banks. A number of crypto businesses have already gained preliminary approval to turn themselves into banks.
PayPal says it has now submitted its own applications to establish a PayPal Bank in the US.
PayPal Holdings, Inc today announced it has submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation to establish PayPal Bank, a proposed Utah-chartered industrial loan company.
It plans to offer interest-bearing savings accounts to customers and says that it would use the money to make loans to small businesses.
“Securing capital remains a significant hurdle for small businesses striving to grow and scale,” said Alex Chriss, President and Chief Executive Officer, PayPal. “Establishing PayPal Bank will strengthen our business and improve our efficiency, enabling us to better support small business growth and economic opportunities across the U.S.”
The Financial Times reports that it follows applications by a number of crypto companies, some of which have received provisional approval.
[PayPal is] seeking to capitalise on the Trump administration’s more permissive approach to financial industry oversight […] PayPal’s application comes after a number of crypto companies and neobanks have this year sought to take advantage of the Trump administration’s openness to non-traditional financial companies entering the regulated banking sector.
If PayPal’s application is similarly approved, then customer deposits would be covered by federal insurance.
PayPal already holds a banking license in Luxembourg.
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