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 New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
U.S. sports betting is booming as NFL and college football fuel massive activity. BetMGM CEO Adam Greenblatt breaks down trends, growth, and what’s next.
President Donald Trump says a deal struck by Netflix last week to buy Warner Bros. Discovery “could be a problem” because of the size of the combined market share. The Republican president says he will be involved in the decision about whether federal regulators should approve the deal. Trump commented Sunday when he was asked about the deal as he walked the red carpet at the Kennedy Center Honors. The $72 billion deal would bring together two of the biggest players in television and film and potentially reshape the entertainment industry.
Disney's changes to a program for disabled visitors are facing challenges in federal court and through a shareholder proposal. The Disability Access Service program, which allows disabled visitors to skip long lines, was overhauled last year. Disney now mostly limits the program to those with developmental disabilities like autism who have difficulty waiting in lines. The changes have sparked criticism from some disability advocates. A shareholder proposal submitted by disability advocates calls for an independent review of Disney's disability policies. Disney plans to block this proposal, claiming it's misleading. It's the latest struggle by Disney to accommodate disabled visitors while stopping past abuses by some theme park guests.
With a merger this big, creators, studios, and theaters all face uncertain futures. Here’s what experts are worried about and what good could come from it.
With disengagement rising and hybrid work shifting, 'Everybody Matters' author Bob Chapman explains why treating people well could define the future of work.
We sat down with Ali Furman, U.S. Consumer Markets Industry Leader at consulting firm PwC to ask what trends she garnered from the initial data this year.
