Just the other day, it was reported that Square Inc. had removed its application to open a new depository bank, but said it will resend its application with the Federal Deposit Insurance Corp. later this year. However, its application with the Utah Department of Financial Institutions is still active.
The first ones that reported this news was American Banker, which saw that Square’s application wasn’t listed anymore in the pending applications. A representative from Square revealed that the company had withdrawn its application after discussing with the FDIC, planning to overhaul the current application before making a refile later on.
“We have been engaged in constructive dialogue with the FDIC, and our decision to withdraw and refile was a procedural step in the review process that will allow us to amend and strengthen some areas of our FDIC insurance application.”
The Independent Community Bankers of America was disapproving of Square’s operations, sending a letter to the FDIC last fall expressing its criticism regarding their application. The organization issued warnings against large commercial or technology businesses that own FDIC-issued LLCs.
The San-Francisco based company, led by CEO Jack Dorsey, has maintained that its objective is to aid small businesses, not rival community banks. The representative on Thursday reiterated this, further adding that:
“Square Capital is uniquely positioned to build a bridge between the financial system and the underserved, and we continue to work closely with the FDIC and Utah DFI on our applications.”
The company planned to found a bank after the success of its Square’s Cash App which was released in 2015 — adding bitcoin trading in early 2018. Dorsey said that he didn’t intend for the application to become the bank account of choice for many users. He was excited to continue with this project and know more about this trend.
Cash App had another breakthrough in June when New York financial regulators approved the licensing Square applied for trading cryptocurrency in the state.
Dorsey has expressed his interest in blockchain technology, stating that he wants this company and app to help make the adoption of bitcoin permanent.
“The internet is going to have a native currency, so let’s not wait for it to happen, let’s help it happen,” stated Dorsey.
Regardless of its enduring success, Square still has to make a lot of improvements if it wants to receive FDIC’s approval. The company cannot afford to take this lightly as it could be the first LLC in almost a decade to be approved by the organization.