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(1) is absolutely true. (2) - well, it isn’t that hard to become a bank, but it is hard to become a bank when your business plan is “we want to operate well ou
by trollbridge 2y ago
(1) is absolutely true.
(2) - well, it isn’t that hard to become a bank, but it is hard to become a bank when your business plan is “we want to operate well outside of established regulation and norms”. (Starting a state chartered bank is particularly straightforward.)
There are many small banks that would like to be acquired and they are generally profitable. A VC-funded fintech would not have a terribly difficult time acquiring a bank, particularly one that wants to offer BaaS, like Synapse did.
- aketchum 2y agoSure - but that is buying a bank not forming a new bank. I do agree that in practice this is how well funded companies become banks.
- 0x3444ac53 2y agoCurrently working at a state chartered credit union. Although it is "easy" to start one, most states regulations are very strict and lag significantly behind federal ones. Hell, where I work we aren't even allowed to serve businesses, loans, deposits, or otherwise.
- quesera 2y ago> state chartered credit union Also not a viable option for a Fintech which aspires to having customers in all 56 US states and territories. You really need a national bank for a sponsor, and Evolve was the most startup-friendly, for many years.