Varo Bank and its organizers secured a full-service national bank charter from the Office of the Comptroller of the Currency and opened on August 1. The OCC’s decision marks the first internet-only bank charter approval since the financial crisis and makes Varo the first consumer-focused FinTech company to receive a charter for a full-service national bank.
In support of the charter application, S&C guided Varo in receiving deposit insurance from the Federal Deposit Insurance Corporation, approval from the Federal Reserve to become a bank holding company, and membership in the Federal Reserve System.
The organizers of Varo Bank are associated with Varo Money, Inc., which was founded in 2015 with the mission to lower the cost of banking and help consumers improve their financial lives. Varo previously offered banking products in partnership with a third-party bank while operating an app with features to budget, track and save money. Following charter approval, Varo is transitioning to its own platform and expanding its offerings, with a focus on financial resiliency, affordable access to credit, and easier management of volatile cash flows for users.
Varo does not plan to open any physical branch locations, but will use its all-mobile platform to offer customers a diverse suite of banking products.
The S&C team was led by Mitch Eitel
, Managing Partner of S&C’s Financial Services Group, with support from Wendy Goldberg and Terence Kim.