Payments firm PayPal files for bank charter in lending push
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A smartphone with the PayPal logo is placed on a laptop in this illustration taken on July 14, 2021. REUTERS/Dado Ruvic/Illustration
Dec 15 (Reuters) - Payments firm PayPal said on Monday it has applied to establish a bank in the United States, as companies rush to capitalize on a friendly regulatory environment under the Trump administration.
The San Jose, California-based company has filed with the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation to form an industrial loan company.
The move reflects a broader push by fintech and crypto companies to seek bank charters to expand their business.
If approved, the move will help PayPal to strengthen its lending offerings to small businesses in the U.S. as well as reduce its reliance on third parties.
"Securing capital remains a significant hurdle for small businesses striving to grow and scale," said PayPal CEO Alex Chriss.
"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."
PayPal also plans to offer interest-bearing savings accounts to customers. The company has provided over $30 billion in loans and capital since 2013, it said.
Since President Trump took office earlier this year, there has been a spurt in bank charter applications as regulators usher in a deregulatory regime and take a more pro-growth line.
Last week, the Office of the Comptroller of the Currency granted crypto giants including Ripple and Circle preliminary approval to establish national trust banks, a major move that could further integrate digital assets into the banking system.
PayPal has selected Mara McNeill to serve as PayPal Bank's president. She comes with over two decades of experience in banking and commercial lending, and has previously served as the CEO of Toyota Financial Savings Bank.
Bloomberg News reported the development earlier in the day.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shinjini Ganguli)
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