{"id":4834,"date":"2020-03-25T18:58:59","date_gmt":"2020-03-25T18:58:59","guid":{"rendered":"https:\/\/www.paymentfacilitator.com\/?p=4834"},"modified":"2022-02-24T22:20:26","modified_gmt":"2022-02-24T22:20:26","slug":"square-gets-go-ahead-to-establish-bank","status":"publish","type":"post","link":"http:\/\/infinicept.com\/payment-facilitator\/archive\/square-gets-go-ahead-to-establish-bank\/","title":{"rendered":"Square Gets Go-Ahead to Establish Bank"},"content":{"rendered":"\n

Two and a half years after filing its first application,\nSquare <\/strong>announced<\/strong><\/a>\nlast week that it has received the green light to move forward with creating an\nindustrial bank for small businesses.<\/strong><\/p>\n\n\n\n

Approval<\/a> of\nthe company\u2019s deposit insurance application last Wednesday by the Federal\nDeposit Insurance Corporation (FDIC) requires Square to establish the bank\nwithin 12 months. The bank will be headquartered in Salt Lake City. Square also\nreceived approval of its charter from the Utah Department of Financial\nInstitutions. <\/p>\n\n\n\n

The company plans to launch Square Financial Services next\nyear to offer small business loans and deposit products. The bank will operate\nas a subsidiary of Square.<\/p>\n\n\n\n

In its press release, the FDIC said that applications are\nevaluated across seven factors, including financial history, adequacy of the\ncompany\u2019s capital structure and its future earnings prospects. It also\nconsiders the convenience and needs of the community the bank is expected to\nserve.<\/p>\n\n\n\n

\u201cWe appreciate the FDIC\u2019s thoughtful approach to our\napplication, and their recognition that Square Capital is uniquely positioned\nto build a bridge between the financial system and the underserved,\u201d Jacqueline\nReses, Square Capital lead and executive chairwoman of the board of directors\nfor Square Financial Services, said.<\/p>\n\n\n\n

\u201cWe\u2019re now focused on the work ahead to build out Square\nFinancial Services and open our bank to small business customers.\u201d<\/p>\n\n\n\n

Square has been on\nthe road to a banking license since 2017. After pulling\nits application to address concerns from regulators, Square resubmitted it\nearly last year.<\/p>\n\n\n\n

Unsurprisingly, Square\u2019s interest in a banking license has\nbeen met with resistance. In March last year, the Independent Community Bankers\nof America asked\nCongress<\/a> to close what it called a loophole that \u201callows commercial\ninterests to own full-service banks while avoiding key regulations and\nconsolidated supervision by the Federal Reserve\u2014threatening the financial\nsystem and creating an uneven regulatory playing field.\u201d<\/p>\n\n\n\n

The day before the Square announcement, the FDIC said<\/a> it was\nseeking comment on a proposed rule regarding industrial banks owned by parent\ncompanies that are not supervised by the Federal Reserve Board. It would\nrequire \u201ccapital and liquidity support\u201d from the bank\u2019s parent company.<\/p>\n\n\n\n

According to the Wall\nStreet Journal<\/a>, Square\u2019s approval came with conditions, \u201cincluding\nmaintaining \u2018significantly higher\u2019 levels of capital than other banks and\nconsenting to have its parent company, Square, examined by the FDIC.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Two and a half years after filing its first application, Square announced last week that it has received the green light to move forward with creating an industrial bank for small businesses.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[1015],"tags":[81,291,398,403,828,832],"class_list":["post-4834","post","type-post","status-publish","format-standard","hentry","category-archive","tag-banking-license","tag-fdic","tag-ilc","tag-industrial-loan-charter","tag-square","tag-square-financial-services"],"acf":[],"_links":{"self":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4834","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/comments?post=4834"}],"version-history":[{"count":4,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4834\/revisions"}],"predecessor-version":[{"id":8374,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4834\/revisions\/8374"}],"wp:attachment":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/media?parent=4834"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/categories?post=4834"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/tags?post=4834"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}