US-based Varo Bank has secured preliminary approval for national bank charter from the Office of the Comptroller of the Currency (OCC).
Image: Varo Bank has secured preliminary approval for national bank charter. Photo: courtesy of Stuart Miles / FreeDigitalPhotos.net.
The approval allows Varo Bank to form a de novo national bank, making it to turn as the first all-mobile national bank in the US.
Varo provides tech-first features to budget, track, and save money, in addition to offering premium banking products through The Bancorp Bank.
As per the Federal Reserve 2017 report, around that 40% of adults are unable to cover an unexpected expense of $400 without selling something or borrowing money.
Varo, which developed all-mobile bank account by using advanced technology, provides fee-free banking, savings accounts and personal loans to the customers.
Under fee-free banking service, the bank will not charge any monthly maintenance fees, foreign transaction fees and ATM withdrawal fees.
The mobile bank also offers automated tools to help build savings, as well as customizable in-app to track spending and set financial goals
Varo Money co-founder and CEO Colin Walsh said: “This is an historic moment and marks the start of a new era in banking.
“We founded Varo because we saw that banks weren’t serving the majority of their customers very well, and we wanted to fix that. So we decided to build a bank from the ground up with the goal of improving consumers’ financial health through better technology and a more efficient business model.”
Varo customers will not be charged any ATM fees at a network of more than 55,000 Allpoint ATMs across the globe.
Allpoint ATMs are located in major retail stores such as Target, Costco, Walgreens, and CVS.
Varo Bank, which is currently in formation, is expected to secure its final national bank charter after completion of organizational steps and satisfaction of the OCC’s conditions/
The bank has to secure approval from the FDIC to obtain insurance and Federal Reserve membership.
Barefoot Innovation Group CEO Jo Ann Barefoot said: “This preliminary approval from the OCC is a signal that regulators recognize the value technology can bring to banking for all Americans.”