The Office of the Comptroller of the Currency announced that it had granted Varo Bank a full-service national bank charter, the first fintech company to be granted a full bank charter.
Varo Money was founded in 2015 and launched publicly in 2017 as a mobile banking startup, offering banking services targeted to younger consumers comfortable with entirely online banking.
In a release, Varo said the charter will allow Varo Bank to offer customers FDIC-insured banking services and enables the company to move to its new technology stack and innovate across a range of financial products.
“This is a thrilling milestone for Varo, as the bank charter has been a core part of Varo’s disruptive vision from the very beginning,” Varo Bank founder and CEO Colin Walsh said in the release. “2020 has been challenging for many of us across the country and has highlighted, once again, how the traditional financial system is not meeting the needs of hardworking, everyday Americans. The ability to operate as a full-service national bank gives Varo more freedom to deliver the kind of innovation and allyship that many Americans have never had from their bank before. We are excited to lead a new wave of financial inclusion by offering fair, transparent, intelligent, and comprehensive financial services to all.”
Acting Comptroller Brian Brooks congratulated Varo Bank on its opening Aug. 1.
“A national bank charter is both a privilege, which Varo has earned, and a responsibility, which it has embraced,” Brooks said in a statement. “Varo Bank’s opening on August 1, 2020, represents the evolution of banking and a new generation of banks that are born from innovation and built on technology intended to empower consumers and businesses.
“As a new national bank, Varo joins the world’s most respected system of financial institutions and has the opportunity to become a household name as many other national banks have become. I congratulate Varo founder Colin Walsh and all the men and women of Varo Bank, N.A. on this important occasion and wish them great success serving the bank needs of their community and customers.”
With the national charter now in hand, Varo Bank said it would expand its services to more holistically target a broader set of customer needs, including financial resiliency, affordable access to credit, and easier management of volatile cash flows.
Bono – the musician and co-founder of The Rise Fund, which has been a longtime investor in Varo – said the success of the company was fulfilling the fund’s mission.
“We created The Rise Fund to back paradigm-shifting entrepreneurs and ideas and that’s what we see in Colin and the Varo team,” Bono said in the release. “Their focus on expanding access to affordable, accessible digital banking is one small, but important step in the bigger mandate to remove the barriers to banking and other financial tools that are too often too difficult, or expensive, for everyone to access.”