FinTech News
São Paulo-Based Nubank Applies for U.S. National Bank Charter
Brazilian neobank Nubank has announced its intent to pursue a banking charter in the United States.
About Nubank’s Bank Charter Application:
This week, Nubank revealed that it had applied for a national bank charter with the U.S. Office of the Comptroller of the Currency. The company says that the move was made in order to “unlock new possibilities within the U.S. financial landscape.” Furthermore, they state that obtaining a charter will allow them to both innovate responsibly and scale effectively in the United States.
Were Nubank to expand to the U.S. with a bank charter, it plans to offer deposit accounts, credit cards, and lending products. Additionally, digital asset custody was also listed as a possible vertical.
In anticipation of this expansion, Nubank has announced a fully owned subsidiary of Nu Holdings that will operate in the U.S.. Nubank co-founder and Chief Growth Officer of Nu Holdings, Cristina Junqueira, will serve as CEO of this new business and has reportedly relocated full-time to the United States. Meanwhile, the Board of Directors will include Roberto Campos Neto (former President of the Central Bank of Brazil), Brian Brooks (former Acting Comptroller of the Currency), Junqueira, and others.
Based in São Paulo, Nubank currently has more than 120 million customers between Brazil, Mexico, and Colombia. In the second quarter of this year, the company posted revenues of $3.7 billion, marking a year-over-year increase of 40%. The company’s stock also trades on the New York Stock Exchange under the ticker symbol $NU.
What They’re Saying:
Discussing this development, Nu Holdings founder and CEO David Vélez stated, “Today, our core focus remains on delivering growth in our existing markets, where we continue to see substantial opportunities for expansion. At the same time, applying for a U.S. national charter helps us better serve our existing customers based in the country and, in the future, connect with those who share similar financial needs and could benefit from our products and services.”
Elsewhere, Junqueira said of the expansion, “Nubank’s purpose continues to be to positively impact people’s lives by offering best-in-class digital financial services. While there’s work ahead, we believe that by working closely with regulators, we will soon be in a position to expand our offering to the broader U.S. market.”
My Thoughts:
The timing of Nubank’s bank charter application is interesting as another international neobank Revolut is reportedly mulling a similar move. However, unlike Nubank, Revolut already operates in the United States by partnering with existing banks (and, in fact, rolled out a new high-yield savings account product to customers just yesterday). Perhaps Revolut will now hang back for a bit and see what sort of reception Nubank gets before moving forward with their potential plans.
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