Square is launching a bank in 2021.
On Wednesday, the U.S. Federal Deposit Insurance Corporation Board (FDIC) gave the payments startup conditional approval for a bank charter to launch Square Financial Services, an Industrial Loan Company. Headquartered in Salt Lake City, Utah, the bank also received approval from the Utah Department of Financial institutions for the charter.
The bank’s primary business will be deposit products and small business loans for its commercial lending business. It plans to continue its business of selling loans to third-party investors, and Square doesn’t expect the bank to have a “material impact on Square’s consolidated balance sheet in 2020.”
Square is led by bitcoin advocate and Silicon Valley mogul Jack Dorsey. Profits related to bitcoin made up half of Square’s Cash App revenue in the fourth quarter 2019, and the company is active in the crypto venture capital space, most recently funding Transparent Financial Systems, a startup developing a real-time “cryptographic settlement” network. But the bank has no plans to offer any features related to cryptocurrency, a Square spokesperson said.
Square’s banking services lead Lewis Goodwin will be the bank’s chief executive and the company’s finance lead will be its chief financial officer. Goodwin was previously president and CEO of Green Dot Bank, and has held senior banking roles at Toyota Savings Bank, Chrysler Financial Bank, and West One Bank. Soto was CFO at Green Dot Bank and held senior roles at Sallie Mae Bank, Chrysler Financial, Toyota Savings, Allegiance Direct Bank and JPMorgan Chase.