CenTrust Bank, N.A.
On March 17, 2025, the OCC conditionally approved the acquisition of CenTrust Bank, a nationally chartered institution, by fintech company SmartBiz Loans. The approval came with specific conditions, notably a requirement to maintain an 11% tier 1 leverage ratio, which is significantly above the standard well-capitalized threshold. This conditional approval subjects SmartBiz to full national bank supervision under the OCC. The action is notable in the BaaS context as it represents a fintech directly acquiring a bank charter rather than relying on a sponsor bank partnership, reflecting an evolving model in the fintech-bank relationship landscape. The elevated capital requirement signals the OCC's cautious approach to fintech-controlled banks.
Verified from source: On March 17, 2025, the OCC conditionally approved SmartBiz Loans' acquisition of CenTrust Bank, N.A.'s national charter, requiring a tier 1 leverage ratio of 11.0% for three years, a $6 million post-transaction capital injection, and adherence to the submitted business plan.
- Establishes precedent for OCC imposing heightened capital conditions on fintech-acquired bank charters
- May encourage other fintechs to pursue direct charter acquisition over BaaS sponsorship models
- Signals that regulators will apply enhanced prudential standards to fintech-owned banks