Social Finance, popularly known as SoFi, has received preliminary conditional approval from the US Office of the Comptroller of the Currency (OCC) on its application for a national bank charter.
With this approval, the lending and fintech company can now receive deposits and write loans on its own. Founded in 2011, the company is currently licensing the charter from another bank to offer its financial services, a standard practice followed by the challenger banks.
SoFi applied for the banking charter license earlier this year, but the process is deemed to be slow and costly. But, this will put the company on a single set of regulatory standards rather than following a 50-state scheme.
The company also applied for a banking charter in 2017 but withdrew the application then due to the sexual harassment scandal, which followed the departure of its senior executives, including its former CEO, Mike Cagney.
A Credit Card with 2 Percent Cashback
Additionally, SoFi announced on Wednesday the launch of a credit card, offering up to 2 percent cash back on spending.
The company launched the credit card in partnership with MasterCard, and initially, it will be available to its existing customers only. However, it has plans to issue the card to all early next year.
Unlike other credit cards, the SoFi credit card is incentivizing debt payment the most. Customers paying for other SoFi products, including investment products and student loan repayments, will receive the maximum 2 percent cashback. For other spending, it will award only 1 percent cashback.
“Based on feedback from our members, we designed a credit card that helps our members pay down debt or invest in the future with every purchase, while building holistic, healthy money habits, ” SoFi CEO, Anthony Noto said in a statement.
The current moves of SoFi can be seen as more diversification of its products. Though the company first offered only refinancing of student loans, it soon added other investment products to its offering as well.