On Tuesday, the Office of the Comptroller of the Currency (OCC) granted a conditional approval to Social Finance, Inc. to create a nationally chartered bank called SoFi Bank despite opposition from national community groups, including the National Community Reinvestment Coalition (NCRC).
Jesse Van Tol, CEO of NCRC, made the following statement:
“The OCC should not have moved forward to the next stage of approval without answering the numerous unanswered questions about the application raised in our August 2020 letter. We have called for an open process where SoFi makes meaningful commitments to serve low-to-moderate income households and people of color and to put it inside a publicly-available framework, where we can verify that the OCC will hold SoFi accountable to clearly-defined performance targets. SoFi provided a skeleton list of proposed activities – there are no numeric goals for significant product lines. It’s not even clear if they will go forward with a strategic plan option.
“The OCC states that it expects a more detailed Community Reinvestment Act (CRA) plan later in the approval process. The problem is that the charter application process represents the best chance for community groups to influence the development of the CRA plan. While it might be unrealistic to expect detailed goals for all aspects of CRA performance at this stage, it is reasonable to ask a lender to indicate how its goals will be formed and to offer a few goals for its key products. None of this was in their application. Nor did it include rigorous commitments regarding fair lending and consumer protections despite SoFi’s checkered past.
“We know that SoFi’s DNA is to serve the young and affluent, and that it reached a settlement with the FTC over its misrepresentations of its student loans only affirms that view. This is another example of a harmful action taken by the OCC that is part of a long series of harmful actions, including the weakening of the CRA and the recent final rule allowing national banks to aid payday and other high-cost lenders efforts to evade state interest rate caps and other important state consumer protections.
“Our objections are not minor; they go to the heart of the proposed bank’s ability to meet the financial services needs of the communities it plans to serve. Other institutions – Rakuten and Formative – that submitted incomplete applications withdrew them after our opposition. The OCC should not have approved this application.