Comptroller calls app-based bank, now with its own charter, part of ‘evolution of banking’

A new bank charter for a San Francisco-based financial institution, but expected to build a national footprint, was touted by the regulator of national banks Friday as representing the “evolution of banking.”

In a release, Acting Comptroller of the Currency Brian P. Brooks said the charter he signed Friday was for Varo Bank, N.A., of San Francisco, whose opening (slated Aug. 1) represents a new generation of banks that are “born from innovation and built on technology intended to empower consumers and businesses.”

The bank first applied for an OCC charter in 2016 as a Salt Lake City, Utah, institution, according to documents on the agency’s website. In 2018, the bank received conditional approval of a de novo charter, according to a letter from the OCC.

That letter from the comptroller’s office notes that the resulting bank’s business model “combines a traditional retail banking approach with modern technology,” the letter states. “The Bank proposes to offer banking products through mobile, online, and phone-based banking channels and intends to include traditional loan and deposit products.”

The bank now operates under the brand “Varo Money.” Since its inception, it has operated its banking services through a partnership with Bancorp Bank, which the new bank said helped it “supply the backbone” for its banking accounts. “Unlike most of the online banks, Varo applied for a banking license in 2016 in order to become a full-fledged bank and operate independently and is set to become one by 2020,” the bank’s Wikipedia page states. The signing of the charter this week completed that process.

According to the Wikipedia page, Varo Money is a “neobank,” which says it offers checking accounts, savings accounts, debit cards, peer to peer payments, and fee-free overdrafts. The bank operates only through a smart-phone app, and not a website.

Acting Comptroller of the Currency Presents Varo Bank, N.A. Its Charter