Varo Money, the 4-year-old digital banking startup with 750,000 users and $600 million in deposits, has applied for a banking license with the Federal Deposit Insurance Corporation (FDIC) this week. The company confirmed this development as part of a $100 million Series C fundraising round announced on Tuesday.

This is Varo’s second application for an FDIC banking charter, following a process initiated in 2016 that was withdrawn in 2018. In 2017, the company also applied for a charter with the Office of the Comptroller of the Currency (OCC), a process that is still open and has not yet been completed, as companies seeking a banking charter need approval from both the FDIC and the OCC. The charter process is among the final steps in Varo’s quest to become a full-fledged banking institution.

According to Marina Gracias, general counsel at Varo, the charter will let the company take more control over its product and service offerings, currently offered in partnership with The Bancorp Bank. It also saves Varo money by eliminating the need to share revenue with a partner bank.

“You’re limited to being able to offer the products the sponsor bank has been licensed to offer and is willing to offer,” Gracias said. “You’re dependent on working through their approval processes, time frames and risk profiles. The national bank charter really lets you control your own destiny.” The FDIC is expected to make a decision within 120 days of receipt of a banking charter application.

Varo said it withdrew its initial FDIC application because it needed more time to ensure its products, policies and procedures complied with FDIC requirements. Since pulling its application, the company began working with Temenos as a core banking provider and Visa DPS for processing. It’s also beefed up its regulatory expertise by appointing former OCC officials to key posts, including Amy Friend as a board member and Deven Bhatt as chief information security officer.

Varo’s goal is to acquire a banking charter by early to mid-2020. The company needs to convince regulators it will satisfy the Community Reinvestment Act of 1977 requirements, including the need to provide credit to low- and moderate-income families within the bank’s geographic footprint. Gracias did not say what Varo’s CRA plan will look like, but she noted that the CRA requirements might change within a year due to the advent of digital-only banking. She added that she is highly confident of Varo’s approval prospects.

Despite its potential, Varo will face significant obstacles in its path to acquiring a charter, according to Julie Hill, a financial institutions regulation professor at the Alabama School of Law. “The FDIC traditionally has not been all that keen on all-online business models because they think they’re risky.”