Law 360: SoFi Clears Initial OCC Hurdle In Quest To Launch Bank

Law 360, October 28, 2020, SoFi Clears Initial OCC Hurdle In Quest To Launch Bank

The Office of the Comptroller of the Currency stated it has granted conditional approval to Social Inc.’s application for a full-service National bank charter, thus moving it one step forward to launching the SoFi Bank NA. It is understood that SoFi Bank will seek membership with the Federal Reserve system and become insured within the Federal Deposit Insurance Corp. SoFi Bank NA will be based in Utah, and is still in the process of completing organizational steps before it’s final approval from the OCC before opening for business.
“This preliminary conditional approval from the OCC is a testament to the mission driven company we have built, the employees who help it grow, and the over 1.5 million members we currently serve,” SoFi CEO Anthony Noto said. “By pursuing a national bank charter, we hope to be able to give consumers more choices and enhanced value when it comes to a full suite of financial services, which can help even more people achieve financial independence.”A national bank charter would allow SoFi to take customer deposits and make loans without using a bank partner. The company submitted its charter application to the OCC in July, nearly three years after it backed off
an earlier effort to create a Utah industrial bank amid internal turmoil touched off by sexual harassment and employee mistreatment claims from former staff. In its Oct. 27 decision letter, the OCC indicated that SoFi’s bank will be required to have minimum
initial paid-in capital of $550 million. At least 30% of this capital must be provided in cash, while the rest can be “high-quality, held-for-sale loans as further described in the Bank’s application and business plan,” the agency said.
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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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