Fintechs Hoping for Bank Charters Face Capital Hurdles

According to the Federal Deposit Insurance Corp., Capital requirements for fintechs interested in bank charters are proving burdensome. Newly chartered financial institutions are required by the Regulator to have achieved a capital-to-assets level of at least 8 percent during its first three years of operating.

FDIC Chairman Jelena McWilliams stated “Working through the capital adequacy issues for fintechs has been rather interesting and cumbersome.” She also said “A lot of them have equity but not really capital; a lot of them are profitable on paper but not really profitable.”