Mercury Technologies said today it applied for a national bank charter and federal deposit insurance, a move that would allow the fintech to operate as a regulated bank and expand its product offerings under direct federal oversight. 

The San Francisco-based Mercury said it submitted an application to the Office of the Comptroller of the Currency for a national bank charter and applied to the Federal Deposit Insurance Corp. for deposit insurance, according to today’s release. The filings mark the start of Mercury’s formal engagement with regulators and do not change its services for customers at this time. 

The announcement follows Chief Executive Immad Akhund’s appearance on CNBC’s Squawk Box earlier this week, when he discussed Mercury and the state of AI generally, as well as demand for AI and data centers, and Mercury’s own investment in AI for back-office applications. 

Mercury Technologies declined FinAi News’ request for comment.

‘The next step’

Founded in 2017, Mercury provides digital banking and financial software primarily to startups, small businesses and entrepreneurs, according to the release. The company said it serves more than 200,000 customers, generates about $650 million in annualized revenue and has been profitable on a GAAP basis for three years.  

“A charter is the next step in our pursuit of radically different banking,” said Chief Executive Immad Akhund in the release. “Once we receive regulatory approval, a charter will let us deliver greater stability, long-term confidence, and trust, while continuing to redefine what radically different banking means.” 

Mercury currently offers checking and savings accounts, cards, payments, lending and investment products through FDIC-insured partner banks and other regulated third parties, according to the company. The company said it will continue working with those partners while building new products and infrastructure as the regulatory process moves forward. 

As part of the announcement, Mercury named Jon Auxier as its chief banking officer and proposed chief executive and president of Mercury Bank, subject to regulatory approval. Auxier previously served as chief financial officer of SoFi Bank and corporate treasurer of SoFi Technologies, where he helped lead the company’s national bank charter effort. He has also held senior roles at Green Dot and Goldman Sachs. 

If approved for the license, Mercury would apply to become a financial holding company under Federal Reserve oversight, the company said. Mercury Bank, N.A. would be formed as a wholly owned subsidiary and headquartered in Utah. 

Tim Mayopoulos, a Mercury board member and former chief executive of Fannie Mae, said the decision reflects the growing role of fintechs in the financial system. “Mercury’s decision to seek a national bank charter shows how innovation and oversight can reinforce one another,” he said. 

Fintech banking license

Mercury is the latest fintech moving into the banking space. Earlier this month, Enova announced its acquisition of digital bank Grasshopper, adding a banking license to Enova’s business. 

Other fintechs that have gained charters include: 

• SmartBiz; 

• SoFi; and 
• Tandem. 

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