The Silicon Valley payment processor is firing back at critics who say its bid for a bank charter would open the door to similar gambits by tech giants. Community activists, meanwhile, seem to be coming around to the idea of Square opening a bank.
The Independent Community Bankers of America is formally opposing a bank charter application by payments processor Square, accusing it of trying to “avoid” certain “legal prohibitions and restrictions.”
Meetings between bank regulators and technology giants like Amazon and PayPal underscore Silicon Valley's growing involvement in the financial services arena, and may presage pursuit of a bank charter.
The payments processor Square has big plans in banking — but even after filing an application to charter an industrial loan company, it still doesn’t see itself as a competitor to most financial institutions.
The company's application, which is expected to be announced as early as Thursday, comes after the online lender SoFi applied in June for an industrial loan charter. The bank is expected to be led by a former Green Dot executive.