Varo Money Receives Conditional OCC Approval for National Bank Charter

Varo Money, a mobile-based financial institution, received conditional approval from the OCC for its national bank charter application around April 2019. This was a significant step toward Varo becoming a fully chartered national bank, reducing its dependence on banking-as-a-service partner banks for deposit-taking and other regulated activities. The announcement coincided with Varo launching its Android app and raising its savings account APY to 2.80%, signaling competitive intent in the consumer banking market.

The conditional approval meant Varo still needed to meet additional requirements before receiving a full charter. The broader regulatory environment remained contested, with the New York Department of Financial Services challenging the OCC's authority to issue fintech charters in a case ruled on May 2, 2019. No other fintech bank charter applications were granted full approval during this period.

The development underscored the growing trend of fintechs seeking direct banking licenses rather than relying solely on embedded finance partnerships.