Payments company PayPal said Monday it has filed to set up a bank in the United States, Bloomberg reported, as companies rush to take advantage of the Donald Trump administration’s favorable regulatory environment.
The company, based in San Jose, Calif., has filed an application with the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation to form an industrial loan company.
The move reflects the increased willingness of fintech and cryptocurrency companies to obtain banking licenses to expand their businesses, at a time when regulatory restrictions on entry into the banking system have been eased. If approved, the measure will help payments giant PayPal strengthen its small business loan offerings in the United States, as well as reduce its reliance on third parties.
“Raising capital remains a major obstacle for small businesses striving to grow and scale,” said Alex Chriss, CEO of PayPal. “The creation of PayPal Bank will strengthen our business and improve our efficiency, allowing us to better support small business growth and economic opportunity across the United States,” he added.
Plans to offer paid accounts
PayPal also plans to offer interest-bearing savings accounts to its customers. The company has provided more than $30 billion in loans and equity since 2013, it says.
Since President Trump took office earlier this year, applications for banking licenses have increased as regulators have introduced a deregulatory regime and taken a more pro-growth line.
Last week, the Office of the Comptroller of the Currency granted cryptocurrency giants like Ripple and Circle preliminary approval to create national trust banks, a major move that could further integrate digital assets into the banking system.
PayPal has chosen Mara McNeill as president of PayPal Bank. She has more than two decades of experience in commercial banking and lending and previously served as CEO of Toyota Financial Savings Bank.
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