Dive Brief:
- Brazilian digital challenger Nubank has received conditional approval from the Office of the Comptroller of the Currency to establish a U.S. national bank, the company said Thursday.
- While the company enters the organization phase and awaits approval from the Federal Deposit Insurance Corp. and the Federal Reserve, Nubank “will focus on fully capitalizing the institution within 12 months and opening the bank within 18 months, as required by regulators.”
- Once fully approved, the São Paulo, Brazil-based company plans to offer deposit accounts, credit cards, lending and digital asset custody. Nubank said it plans to establish U.S. hubs in Miami, the San Francisco Bay area, northern Virginia and the North Carolina research triangle.
Dive Insight:
The Brazilian company, founded in 2013, has about 127 million customers across Brazil, Mexico and Colombia. Co-founder Cristina Junqueira will lead operations in the U.S., a far more fragmented banking market than the other countries where the fintech operates.
“Receiving federal approval for a national bank charter is a significant step in our journey to becoming a solid, compliant, and competitive regulated institution in the U.S.,” Junqueira said in the release.
Roberto Campos Neto, former president of the Central Bank of Brazil, will serve as chairman of the board, Nubank said.
“This approval isn’t just an expansion of our operation; it’s an opportunity to prove our thesis that a digital-first, customer-centric model is the future of financial services globally,” David Vélez, founder and CEO of Nu Holdings, said in the release. “While we remain fully focused on our core markets in Brazil, Mexico, and Colombia, this step allows us to build the next generation of banking in the United States.”
The company submitted its application to the OCC on Sept. 30. Receiving conditional approval after 121 days “sends a strong signal” to other charter applicants that the agency is committed to quicker, more predictable timelines, said Michele Alt, co-founder and partner at financial services advisory and investment firm Klaros Group, which worked with Nubank on the application.
“The days of slow-walking charter applications are clearly over and that’s good news for aspiring financial innovators,” Alt said.
As bank regulators have expressed a desire to see more new bank formation, the number of charter applications filed with the OCC last year matched the number submitted in the previous four years combined. Comptroller Jonathan Gould has said the rise in charter applications “signals healthy competition, a commitment to innovation, and should be encouraging to all of us.”
In a LinkedIn post Thursday, Junqueira credited regulators with providing “a transparent and rigorous approval process; it is encouraging to see such a clear and constructive pathway for financial innovation.”
This month, the Dutch neobank Bunq re-applied for a de novo license with the OCC, after seeking one in 2023 and then forgoing that effort. U.K. neobank Revolut also indicated it’s eyeing a U.S. charter.
