The Federal Deposit Insurance Corporation (FDIC) gave the green light to an application from the FinTech firm Square to create a de novo industrial bank in Utah, the agency said on Wednesday (March 18).
Square Financial Services will originate commercial loans to the retailers that use Square for payments. The headquarters will be in Salt Lake City, Utah.
The Utah Department of Financial Institutions still has to issues approvals to the San Francisco-based FinTech.
Square, Inc. was formed in 2009 as a payment services provider to enable businesses to accept card payments. The platform has been expanded to include point-of-sale payments, financing and other services.
“FDIC staff found that Square satisfied each of the statutory factors required for approval, subject to certain conditions. One of the conditions would require the proposed bank to maintain levels of capital that are significantly higher than typical FDIC-insured banks,” FDIC Chairman Jelena McWilliams said a statement.