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Payments company Square to re-apply for a bank license

Friday 21 December 2018 | 08:26 AM CET

Square, the payments company, is refiling its application with US state and federal regulators for a bank license.

Square is applying with the Federal Deposit Insurance Corp (FDIC) for a special industrial loan company (ILC) license, that allows non-traditional financial companies to collect government-insured deposits. The bank would be Utah-chartered.

Square, which is best known for its small credit card reader, had first applied for banking charter in September 2017, but had withdrawn its application earlier in 2018.

If granted a license, the new unit, called Square Financial Services, mainly will be offering deposit accounts and loans to small businesses.

Since withdrawing its application, Square has been in discussions with regulators in order to address some of the questions that had been raised.

As a result, it has enhanced certain aspects of the application, such as naming additional officers and the buildout of its Salt Lake City office.

Square also provided additional documentation and information to regulators on areas including the company’s products and services, as well as the proposed bank infrastructure and governance.

Square’s banking ambitions come as financial technology companies expand the types of services they offer and move beyond their initial area of focus. Many are now seeking to attract deposits.
Square already lends to small businesses through a partnership with a bank.

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