UPDATE: April 13, 2020: Chime expanded its overdraft program to 100,000 users, allowing them to overdraft up to $200, the digital bank announced Wednesday. After piloting a program that allowed 1,000 users to access their stimulus checks early though its SpotMe feature, Chime said the majority of the participants in the test did not access the full $1,200. Chime CEO Chris Britt said about 500 people took the offer, using $150 to $300 on average, according to Forbes.
“As a result, we’ve decided to modify our approach to allow us to offer some additional short-term SpotMe support to even more members,” the company said.
Digital bank Chime is equipping some customers to receive their $1,200 stimulus checks weeks ahead of when the government is expected to issue the payments, according to CNBC.
The bank said it selected 1,000 customers at random and is using its own capital until the government issues the checks. The federal checks are part of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act that was signed into law last week. The first Americans are expected to begin receiving the checks the week of April 13, according to an IRS memo, seen by Politico. Five million stimulus checks are expected to be sent weekly, a process that could take up to 20 weeks, according to the memo, which was sent to the House Ways and Means Committee.
- "We think the aggressive action taken by the government is awesome, and we applaud it, but consumers need faster access to that money to pay their bills," Chime CEO Chris Britt told CNBC.
The San Francisco-based bank is providing the cash to select customers through its no-fee SpotMe feature, which allows users to overdraft on their accounts.
Britt said he wants to expand the pilot program to the bank’s 8 million users if he can get assurance from the government that Chime users can’t redirect stimulus payments to other bank accounts.
"We’re putting real dollars on the line, without interest rates or guarantees. We’d love to give it to more people. If we had greater certainty that the payments will hit our accounts, we'd do it," he said.
Britt told CNBC he got the idea from "Shark Tank" star and serial entrepreneur Mark Cuban. Cuban, who owns the Dallas Mavericks, struck a multiyear sponsorship deal in January, under which Chime's logo will appear on the upper left shoulder area of all Mavs jerseys .
"I've been talking to Mark quite a bit, and he’s been vocal about companies helping out," Britt said.
Chime’s pilot project resembles the launch of a community bank initiative that Cuban also had a hand in.
Following a suggestion from the investor and entrepreneur, Citizens Bank of Edmond CEO Jill Castilla said the Oklahoma-based bank also plans to allow customers to receive a large percentage of their stimulus checks now, instead of waiting on the federal government.
Castilla told American Banker she was motivated by a tweet from Cuban urging banks to get the stimulus to Americans who need the cash now.
Over several phone calls and emails, Castilla said Cuban helped her map out a no-interest overdraft line that customers can repay once they receive the government checks.
Cuban used Twitter on Monday to bring attention to the bank’s program.
"This is what every small bank should be doing! Thanks to @CitizensEdmond for offering a program to their depositors that gives them EARLY ACCESS to their federal STIMULUS CHECKS!" he tweeted. "The IRS says 3 weeks. @JillCastilla says NOW! If you are a banker DM Jill and get with the program!"
Britt told CNBC he hopes other fintechs, as well as big banks, will find ways to help speed up the stimulus payments.
"We are legitimately trying to be good citizens," Britt said. "What if Bank of America or other people did this, too?"