Second time’s a charm? San Francisco-based payments company Square is throwing its hat in the ring and moving forward with its ambitions to enter banking, after deciding to rescind its initial application to “amend and strengthen” its case to regulators.
CNBC reports that if Square’s recent reapplication with the Federal Deposit Insurance Corp. for a special industrial loan company license is approved, it would have access to deposit insurance and be able to operate without going through outside banks and intermediaries.
So far, the company offers a credit card processor, payment hardware, peer-to-peer Cash App and small business loans via Square Capital.
“Square Capital is uniquely positioned to build a bridge between the financial system and the underserved, creating access for small businesses to both capital and the economy. We will continue to work closely with the FDIC and Utah DFI as they review our applications for Square Financial Services.”
“Square Capital is uniquely positioned to build a bridge between the financial system and the underserved, creating access for small businesses to both capital and the economy,” Jacqueline Reses, Square Capital Lead said in a statement. “We will continue to work closely with the FDIC and Utah DFI as they review our applications for Square Financial Services.”
To provide requested additional information to state and federal regulators, with whom Square has been in speaking since July, Square brought on additional officers for the company including former Green Dot executive Brandon Soto, who now will be the chief financial officer of Square Financial Services.
Other steps towards this license application include an expansion of its Salt Lake City offices, additional documentation on Square’s products and services, and an outline of its Square Capital product offerings and the proposed bank infrastructure and governance, according to CNBC.
By playing by the rules, Square hopes to avoid running afoul of regulators and steer clear of missteps to which fast-moving fintech companies can be prone.