Robinhood, a Fintech that seeks to provide a growing number of banking services, has pulled its application for a national bank charter filed with the Office of the Comptroller of the Currency (OCC), according to a report by CNBC.
Robinhood filed for a “Charter National Bank Under Holding Company” in April of 2019. This was not for the elusive Fintech Charter which remains in limbo due to lawsuits filed against the OCC as well intense lobbying by the friends of traditional banks.
A spokesperson commented on the voluntary action:
“Robinhood will continue to focus on increasing participation in the financial system and challenging the industry to better serve everyone. We appreciate the efforts and collaboration of all the parties we worked with throughout this process.”
The move was described as not impacting the company’s roadmap.
In fact, Robinhood recently announced the availability of FDIC insured savings accounts. A key feature for Fintechs that seek to challenge traditional brick and mortar banks.
Robinhood has also announced an expansion into the United Kingdom, one of the most Fintech friendly jurisdictions in the world. In the UK, competition and innovation is encouraged and embraced. In the US, traditional banks have effectively lobbied against digital-only challengers to slow the growth of competition that may provide better services for less while undercutting traditional banks’ reason to be.
The regulatory environment in the US is one of the most convoluted in the world. With multiple federal regulators touching the sector, as well as all 50 states, only the largest Fintechs possess the resources to challenge incumbents. While traditional financial services firms once groaned about the byzantine regulatory environment, in recent years traditional financial firms have come to embrace these same outdated rules as an effective moat boxing out Fintech upstarts.
Expect Robinhood to continue to weave its ways around the rules by partnering with a diverse number of regulated firms to provide services consumers denand and need. One way or another, Robinhood is poised to continue to challenge old finance.