Digital Banking Startup Makes History and Changes Course of Banking as First Fintech to Receive Preliminary Approval for a National Bank Charter from the OCC
SAN FRANCISCO – The organizers of Varo Bank, N.A. today announced they have been granted preliminary approval by the Office of the Comptroller of the Currency (OCC) of their application to form a de novo national bank, putting Varo on track to become the first all-mobile national bank in the history of the United States.
“This is an historic moment and marks the start of a new era in banking,” said Colin Walsh, co-founder and CEO of Varo Money. “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 has a social mission to lower the cost of banking and help consumers improve their financial lives. A 2017 report from the Federal Reserve showed that 40% of adults would not be able to cover an unexpected expense of $400 without selling something or borrowing money. Varo can improve the financial health of millions by helping them manage expenses and save money by providing no-cost premium banking services that are accessible through a smartphone.
Varo’s all-mobile Bank Account is built with best-in-class technology wrapped in an intuitive design and user experience. Varo offers customers:
Varo customers pay no ATM fees at a network of more than 55,000 Allpoint ATMs worldwide. Allpoint ATMs are located in popular retail stores—like Target, Costco, Walgreens, and CVS—so customers don’t have to go out of their way to get cash at a bank branch ATM.
Varo Bank, N.A. is currently in formation and will obtain its final national bank charter upon completion of organizational steps and satisfaction of the OCC’s conditions, as well as approval from the FDIC to obtain insurance and Federal Reserve membership. Varo, as a new national bank, will be able to deliver on its mission to help Americans achieve better financial health nationwide, while offering customers a full range of products and solutions with the highest standards of consumer protection.
Varo was founded by Colin Walsh, CEO, and Kolya Klymenko, CTO, and counts among its team the best talent from some of the world’s leading brands, including Amazon, American Express, Apple, Citi, McKinsey, Instagram, and Wells Fargo.
“This preliminary approval from the OCC is a signal that regulators recognize the value technology can bring to banking for all Americans,” said Jo Ann Barefoot, CEO of Barefoot Innovation Group and formerly deputy comptroller of the OCC and senior fellow at the Harvard Kennedy School Center for Business and Government. “Technology is not only lowering costs for consumers, but it’s also adding new benefits such as budgeting and money management that’s seamlessly available on a smartphone. The result is that more Americans will be empowered with better tools to improve their financial health. Varo’s success is a breakthrough moment for consumer banking and is setting a new standard.”
Varo was founded in 2015 and has raised more than $79M in funding, led by Warburg Pincus and The Rise Fund, a global impact fund led by private equity firm TPG.
^Non-Allpoint ATM owners may assess a fee for ATM withdrawals, but Varo does not charge a fee.
*Varo’s savings interest rate is variable and may change. The balance in savings must be at least $0.01 to earn interest. The APY disclosed is accurate as of 07.01.2018.
**Varo Personal Loan offered by Varo Money Inc. under state licenses; subject to application approval. NMLS#1547251
Varo Bank Accounts are provided by The Bancorp Bank, Member FDIC. Deposits are FDIC-insured up to $250,000 through The Bancorp Bank.
Varo Money, Inc. (“Varo”) combines mobile technology with a social mission to provide access to no-cost premium bank accounts through better service and automated savings tools. We believe everyone has a right to high-quality banking at no cost regardless of net worth. In addition to premium banking products offered through The Bancorp Bank, Varo provides tech-first features to budget, track, and save money as a way to help people manage their money more easily. Varo serves customers without being tied to a branch and embraces technology to provide helpful banking relationships. Based in San Francisco and Utah and privately held, Varo has raised $79M to date, led by Warburg Pincus. Varo Personal Loan and Varo Backup Line are offered by Varo Money, Inc., under state licenses, subject to application approval. For more information, please visit www.varomoney.com and follow Varo on Facebook @varomoney or Twitter @varomoney.
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