PayPal Seeks Banking Status to Boost Lending Amid US Regulation Easing
PayPal Holdings Inc has submitted an application to establish itself as a bank in the United States, aiming to capitalize on the Trump administration’s willingness to allow financial-technology companies to integrate into the banking system. In a statement released on Monday, PayPal announced that the payments-focused firm has submitted applications to the Federal Deposit Insurance Corp. and the Utah Department of Financial Institutions to establish a Utah-chartered industrial loan company.
If approved, PayPal Bank would assist the firm in enhancing its small-business lending capabilities. The statement noted that the company has facilitated access to over $30 billion in loans and capital since 2013. “Securing capital remains a significant hurdle for small businesses striving to grow and scale,” stated PayPal Chief Executive Officer Alex Chriss. “Establishing PayPal Bank will strengthen our business and improve our efficiency, enabling us to better support small-business growth and economic opportunities across the US.”
The application follows a series of cryptocurrency firms receiving preliminary regulatory approval to operate as banks last week, including Circle Internet Group Inc., Ripple, and Paxos. Since President Donald Trump took office in January, there has been a notable increase in interest in establishing banks, contrasting sharply with the Biden administration’s term, during which very few applications were submitted and even fewer were considered, as it was widely understood that gaining approval would be difficult. That has now changed.
In addition to the crypto firms that have received approval, Nissan Motor Co.’s financing arm submitted an application for the same charter that PayPal is currently seeking, while Japan’s Sony Group Corp. has also put forth an application to become a bank. PayPal, which already holds a banking license in Luxembourg, expressed its interest in providing customers with interest-bearing savings accounts as the company enhances and expands its consumer-focused finance offerings. If approved, the president of PayPal Bank will be Mara McNeill, who previously held the position of CEO at the financing division of Toyota Motor Corp.
