Robinhood has confirmed it's withdrawing its federal banking charter application with the U.S Office of the Comptroller of the Currency.
The fintech unicorn, known for its zero-commission stock trading service, has no plans to resubmit the application. Its approval would have allowed Robinhood to offer consumers its own banking services, rather than doing so in partnership with a smaller but fully regulated bank on the backend. CNBC first reported the news on Wednesday.
"We are voluntarily withdrawing our OCC application for a national bank charter," a Robinhood spokesman told Cheddar in an emailed statement Wednesday. "Robinhood will continue to focus on increasing participation in the financial system and challenging the industry to better serve everyone."
The withdrawal highlights a fast-growing industry of startups whose collective agile development strategy tends to be at odds with the highly regulated and slow-moving banking industry they're trying to shake up. But it isn't the first to pull its application: In 2017 SoFi halted the process of its application for an ILC, or industrial loan company license, from the Federal Deposit Insurance Corporation; and Square withdrew an ILC application last year, though it has resubmitted it and is currently awaiting a decision.
Being a bank can be a sustainable business model, allow a company to control its own destiny and scale within the regulated environment. But when a bank surpasses $10 billion in assets, it becomes subject to heightened regulatory requirements like stress tests and caps on interchange fees, which merchants pay whenever a customer uses a credit or debit card to make a purchase.
Robinhood doesn't disclose its assets under management. It currently has six million users, and in July it raised $323 million in a funding round valuing the startup at $7.6 billion.
Challenger banks, or fully-regulated, digital-first banks, have been popular in the UK and Europe, with Revolut, Monzo, and N26 soon expanding into the U.S. But American digital banks — like Chime, SoFi, MoneyLion, and Varo — have so far opted to partner with established banks in order to provide insured deposit services rather than become regulated entities themselves.
The social video platform's future remains in doubt, as players scramble to profit from the chaos. Plus: Big oil gets bigger, DOGE downsizes, and tariffs!
Ty Young, CEO of Ty J. Young Wealth Management, joins Cheddar to discuss Trump's moves as he returns to Washington D.C. and how it may affect the U.S. economy.
Starbucks’ decision to restrict its restrooms to paying customers has flushed out a wider problem: a patchwork of restroom use policies that varies by state and city. Starbucks announced last week a new code of conduct that says people need to make a purchase if they want to hang out or use the restroom. The coffee chain's policy change for bathroom privileges has left Americans confused and divided over who gets to go and when. The American Restroom Association, a public toilet advocacy group, was among the critics. Rules about restroom access in restaurants vary by state, city and county. The National Retail Federation says private businesses have a right to limit restroom use.
President Donald Trump is talking up a joint venture investing up to $500 billion for infrastructure tied to artificial intelligence by a new partnership formed by OpenAI, Oracle and SoftBank. The new entity, Stargate, will start building out data centers and the electricity generation needed for the further development of the fast-evolving AI in Texas, according to the White House. The initial investment is expected to be $100 billion and could reach five times that sum. While Trump has seized on similar announcements to show that his presidency is boosting the economy, there were already expectations of a massive buildout of data centers and electricity plants needed for the development of AI.
Chris Ruder, Spikeball Founder and CEO, explains how he and his friends put roundnet on the global map, plus, how Spikeball helps people "find their circle."
J.W. Roth, CEO of Venu Holding Corporation, discusses the company's IPO and plans to redefine live music entertainment with their fan founded, fan-owned model.
