SoFi Gets OCC Approval to Acquire National Bank — But Must Stay Away From Crypto

On January 18, the Office of the Comptroller of the Currency (OCC) conditionally approved an application by Social Finance Inc. (SoFi) to acquire Golden Pacific Bank, National Association, so long as the new bank does “not engage in any crypto-asset activities or services.”

SoFi’s application allows for the creation of SoFi Bank, National Association (SoFi Bank), as a full-service national bank headquartered in Cottonwood Heights, UT. To complete the transaction, the OCC approved an interim national bank charter that will merge with and into Golden Pacific, which will then be renamed SoFi Bank. In addition, SoFi Technologies, the parent company of SoFi Bank, has applied to the Federal Reserve to become a bank holding company and therefore subject to holding company supervision.

Among other conditions, the OCC’s approval requires that SoFi Bank “shall not engage in any crypto-asset activities or services currently performed by [Social Finance Inc.], or any other crypto-asset activities or services, unless it has received prior written determination of no supervisory objection from the OCC under the provisions set forth in the Operating Agreement,” which it must enter into with the OCC, and that following the termination of the Operating Agreement, SoFi Bank “will remain subject to the non-objection process discussed in OCC Interpretive Letter No. 1179 (Nov. 18, 2021).”

“Today’s decision brings SoFi, a large fintech, inside the federal bank regulatory perimeter, where it will be subject to comprehensive supervision and the full panoply of bank regulations, including the Community Reinvestment Act. This levels the playing field and will ensure that SoFi’s deposit and lending activities are conducted safely and soundly, including limiting the bank’s ability to engage in crypto-asset activities,” Acting Comptroller Michael J. Hsu said. “This action is consistent with the comprehensive legal and policy review of pending licensing decisions I initiated last May, and our work with other federal and state regulators to develop a coordinated approach to modernizing the federal regulatory perimeter. Like every other national bank we supervise, the OCC will require SoFi Bank, N. A., to be adequately capitalized, have strong risk management programs, policies and procedures in place, and provide fair treatment to its customers.”

It remains to be seen whether handling crypto will eventually be permitted, but this issue may be solvable given that other national banks are engaging in crypto activities.