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Published: February 2022

Regulators should reject FinTech startup’s bank charter application

Coalition: National Community Reinvestment Coalition

Advocates called upon federal banking regulators to reject a worrisome and inadequate bank charter application recently filed by Figure Bank, National Association. The coalition warns that the FinTech company’s bank application is silent about core issues of honesty, transparency and sustainability. Federal banking regulators are the public’s first line of defense. They have a duty to protect the public from investors who are more interested in lining their own pockets than in helping their customers and communities build wealth.

In a letter to federal banking regulators, advocates warn that Figure Bank and its parent company, Figure Lending LLC, have engaged in questionable practices that raise significant questions regarding disparate impact, abusive lending, and safety and soundness, making its charter application too risky to approve. Figure Bank first sought a federal bank charter in 2020, proposing to take deposits without insuring them. Figure withdrew that application following multi-state litigation, before filing another in December 2021. This revised proposal includes an application for full FDIC deposit insurance but seeks broad exemptions from Community Reinvestment Act obligations and other congressional mandates. A bank charter is a privilege, not a right. An application for a bank charter must have sufficient detail and descriptions of a CRA plan to reassure the public that underserved populations and communities would reap significant benefits from the proposed bank.

Other Organizations

Americans for Financial Reform Education Fund | Consumer Action | Grounded Solutions Network

More Information

For more information, please visit NCRC.

https://www.ncrc.org/fairlending/

https://ncrc.org/treasureCRA/

Download PDF

Regulators should reject FinTech startup’s bank charter application   (NCRC_Comment_on_Figure.pdf)

 

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