The company announced Monday (April 27) that it has gotten conditional approval for a national banking charter from the Office of the Comptroller of the Currency (OCC) to establish Mercury Bank.
“We applied for this charter because the best founders in the country deserve a bank that was built for them,” said Immad Akhund, co-founder and CEO of Mercury. “Our customers have been asking for Zelle, for expanded lending, for payment infrastructure we actually control. We couldn’t give them those things without a bank charter. Those gaps have always bothered me. This is how we start closing them.”
With this approval, Mercury added, it enters the bank organization phase, in which it will try to meet remaining requirements and get final authorization from the OCC, as well as pending approvals from the Federal Deposit Insurance Corp. (FDIC) and the Federal Reserve.
As the new bank becomes fully operational, it will begin offering new capabilities, like Zelle tied directly to accounts for person-to-person and business payments, more lending products for businesses and consumers, and a “deeper payments infrastructure for faster money movement and more direct control over how payments are processed.”
Mercury applied for the charter in December, saying it wanted to merge its financial software with the strength and stability of a regulated institution and become “the bank for builders.”
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The company is part of a wave of FinTechs seeking banking charters from the OCC, a trend PYMNTS explored earlier this year.
“Traditionally, FinTech companies have built around banks, not as banks,” that report said. “The strategy was simple: partner for access to payments rails, deposit insurance and compliance infrastructure; don’t built it from the ground up yourself.”
That model offered speed but also fragility, as sponsor banks could change terms, regulators could reinterpret guidance and public scrutiny picked up after high-profile failures revealed the limitations of “banking-as-a-service.”
However, receiving a charter is “not a monolith,” that report said, as de novo charters in the U.S. cover a range of banking business models. Each are governed by different regulators, operate under different statutes and enjoy different privileges. Although the headlines can blur these lines, the operational consequences are far from vague, the report added.
A bank charter “is not a trophy, and it certainly isn’t a product label, but it’s a public trust,” Rodney E. Hood, former acting comptroller of the currency, told Competition Policy International, a PYMNTS company, in an interview in January.
