Let's play ... Who Wants To Be a Bank!

0:00NPR. This is the indicator from Planet Money. I'm Waylon Wong. I'm Ricky Molvey, but Waylon, this isn't the indicator. What? This is Who Wants To Be A Bank? Ah, that's right. This is the game show where financial technology companies vie for a shot at a US banking license. There are all these companies out there that do stuff with our money, but are technically not banks. Payment apps, crypto firms, buy now pay later companies. They don't have banking licenses, but they want them. In the Trump administration and its regulators want to grant them. In fact, they've already approved more new banks this year than in all of 2025. Today on the show, why do so many Fintech companies want to be banks and what does it take to get there? And out today on Who Wants To Be A Bank?

1:02The games will begin after this word from our sponsor. This message comes from HomeServe, a burst pipe, a dead water heater, the AC calling it quits. Who do you call? HomeServe is an easy way to handle unexpected home repairs with plans covering stuff basic homeowners insurance usually won't. Instead of scrambling for a contractor, you make one call to get the repair process started. Join the millions of customers who trust HomeServe right now. Go to homeserve.com slash podcast for 50% less your first year. Savings compared to renewal price, void and Florida. This message comes from the Center for US Voters Abroad Foundation. US citizens live, travel and serve all over the world, but wherever they are, they can stay connected to home through voting. All US citizens abroad may request an absentee ballot to vote in the 2026 election and requesting yours is easy. Keep your connection strong no matter how far away you are.

2:02Visit registerabroad.com to get started. Welcome back to Who Wants To Be A Bank? It's the game show where financial technology companies undergo a grueling process in hopes of winning a coveted banking license and some other goodies. To explain what's at stake here, we're going to bring on stage Michelle Alt. She's a co-founder of a firm called the Clareus Group. It advises fintechs on becoming banks. Are you like the fintech whisperer? Well, I like to think of myself as the regulatory whisperer. My jam is helping non-banks and fintechs. We navigate the very perplexing and cumbersome and bison team process of getting a bank license in the US. And that involves quite a bit of whispering to the regulators and sometimes shouting. Sounds exciting. And Michelle tells us she's been busy lately. That's because one of the main bank regulators in the US has announced that it is once again

3:06open for business. It said there were years in which very few new banks got approved. And now it wants more fresh faces to increase competition in the industry. And what's in it for the fintechs? Michelle says these companies want greater access to the US financial system, even if it comes with more regulatory scrutiny. It's sort of like, ooh, incumbent me, please, incumbent me. I love incumbents. So what are these prizes waiting at the end of the regulatory rainbow? Michelle, tell them what's behind door number one. Weelyn, they've won deposit insurance. Yay! That's right. This prize is furnished by the Federal Deposit Insurance Corporation or FDIC. The government backstops some types of customer deposits up to $250,000. Having this insurance lowers the operating costs for banks, they can collect deposits instead of relying on private, more expensive sources of funding. Now, there are different kinds of bank licenses in the US.

4:10Most banks get the FDIC backstop. For other types, there are additional upsides. What's behind door number two, Michelle? Wait, there's more. They also get access to the Fed discount window. That's the ability to borrow money from the Federal Reserve. Very useful in emergencies. All right, let's open door number three. The biggest grand prize of all, a Fed-master account. This is a bank's account at the Federal Reserve. It allows a bank to talk to other banks and process payments. There's a critical, critical communication and payment system provided by the Fed. If you don't have that, you don't have a lot. You know, you are not kind of a real bank like Pinocchio became a real boy. So these are the fabulous prizes. And now it's time to meet today's contestant on... Who wants to be a bank?

5:11I'm Imada Kuhn, co-founded CEO of Mercury. Amad, welcome to Who Wants to Be a Bank? Woo, woo indeed. Amad co-founded his company Mercury in 2017. It caters to startups and small businesses, and it offers checking accounts, a credit card, and short-term loans. Now, you might hear that in think, sounds an awful lot like a bank, but Mercury is technically not a bank. Instead, it partners with other banks. These relationships give Mercury access to, for example, federal deposit insurance. Amad says he needed these partnerships at the beginning because he was new to banking, but he always wanted Mercury to eventually become a full-fledged bank. There's definitely things that we wouldn't want to do that we can't do because we're not a bank. Things like Zell, the widely used service that lets customers send money back and forth between banks. Or cashiers checks. These are checks that are essentially guaranteed by the bank. You don't think about how many little things banks do provide.

6:13It's like tens of things, and there's a very long tail. But when you really need that thing, you really need a cashier's check. It's kind of unacceptable if you're a bank can't do it. Mercury filed for a bank charter last year. The company needs approval from three government agencies total, including the FDIC. In April, they got conditional approval from one. Did you celebrate when you got the conditional approval or did you not want to jinx it? We did celebrate. We're remote companies. I think we've popped some champagne. We send each other budget emojis and slack. Amad, a coup of Mercury. Thanks for playing. Who wants to be a bank? Now it's time to meet a recent winner of the show. Tell the audience who you are. Richard Rosenthal. I am currently the bank president and CEO of Square Financial Services. Richard, welcome to Who Wants To Be A Bank. I'm glad to be here. So tell me why did Square want to be a bank? Big picture for us, it's going to be about growing more deposits and balances.

7:15Hopefully, people will bank more with us to offer the best price, be the most competitive. The best way to do that is having your own bank. If you've spent money at a small business, you've probably encountered Square. The company makes cash registers and credit card readers. It got approval in 2021 to become a bank. And today, it offers savings accounts and loans to both businesses and consumers. Now, Square got a different kind of bank license than what Mercury is applying for. There is a kind of bank charter designed for businesses whose bread and butter is something other than banking. You just think about the Square point of sale business. There's a hardware technology part of that business that is not at banking business. So Square has gone through the approval gauntlet and many more companies are in this process. This year through August, one of the main bank regulators, the office of the comptroller of the currency or OCC, has approved 14 applications. That's double the number of approvals for all of 2025. But getting the green light isn't easy. Michelle or Fintech advisor used to be a lawyer at the OCC.

8:17She says it recently issued guidance for aspiring banks that she sums up like this. Stop sending us crap. The OCC might be open for business, but there's no rubber stamp here. You've got to do the work. The mountains of paperwork and compliance are to demonstrate that these new banks are up to the task of safeguarding their customers' money. Insolvent or poorly run banks can destabilize the financial system. Crypto company World Liberty Financial got conditional approval from regulators last month. That moved you scrutiny because of the company's ties with the Trump family. Still, the regulatory welcome mat is out there. Companies like PayPal and Clarna have applied for their own bank licenses. And of course, today's contestant, Mercury. Will Mercury be able to collect those sweet, sweet FDIC insured deposits and earn that shiny, new Fed master account? Bye now next time on! Ooh, wants to be a bank! This show is taped in front of a live studio audience.

9:19This episode was produced by Ijacorera's with Engineering by Cinalo Frado. It was fact checked by Cier Juarez and edited by Julia Richie, Kaking Canyon Isler's Show's Editor and the Indicator is a production of NPR. This message comes from HomeServe, a birthed pipe, a dead water heater, the AC calling it quits. Who do you call? HomeServe is an easy way to handle unexpected home repairs, with plans covering stuff basic homeowners insurance usually won't. Instead of scrambling for a contractor, you make one call to get the repair process started. Join the millions of customers who trust HomeServe right now. Go to homeServe.com slash podcast for 50% last year first year. Savings compared to renewal price void in Florida. This message comes from WorkLife, a podcast from Ted. Company Builder Molly Graham uncovers valuable insights from people on the inside of highly successful companies to help you find out what actually works when nothing goes as planned. Find WorkLife wherever you listen.