Chime has agreed to stop using the word 'bank' after California regulators

[kafa88]

Chime might call himself a slotxo It was "the fastest growing fintech in the US" but has agreed to stop claiming itself as a "bank", according to a new report by American Banker.The eight-year-old San Francisco resident outfit was apparently the target of an investigation by the California Department of Financial Protection and Innovation after Chime used "chimebank" in website addresses, including "the bank". And "used banking" elsewhere in the ad, as indicated by the agency in the Settlement Agreement.


As stated by AB Chime made the decision to terminate prematurely required by the regulator.This development should not surprise anyone who is familiar with banking law. No attire can represent itself as a bank or credit union unless authorized to operate a banking business. The committee that pushed Chime back to issue such licenses and regulate California state-owned banks through the Department of Financial Protection and Innovation said in the deal:

At all times involved here, Chime is not authorized to operate. As a bank in California or in other jurisdictions and is not exempt from that license.Sometimes, Chime tried to differentiate itself from the bank when the company raised its latest funding round - the $ 485 million Series F round last September valued at $ 14.5 billion, CEO Chris Britt told Reuters. “We are more like a consumer software company than a bank… we also have a transaction-based business model with highly predictable, highly repeatable and profitable processing,” said CNBC.


Still, Chime, like many newer fintech companies, seems to accept the terms "neobank" and "challenger bank" and perhaps not surprising. It's easier to convey to consumers what they are selling, which are banking services that include - in this case debit card, spending account, and savings account - all available through the user's mobile phone.With the settlement expected to see more startups like Chime, it makes it clear that in most cases they don't have a bank charter and are served by banks that do instead. For example, in Chime's case, it now makes the company's website more explicitly a "financial technology company" and "not a bank", and that banking services are provided

[Giass]

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