Sofi wins federal approval to become a bank

Photo (c) kertlis - Getty Images

The fintech company currently provides a suite of financial services

Sofi is one of the largest fintech companies and is a cross between a technology company and a bank. This week, it took another step toward becoming a bank.

The company announced that the Office of the Comptroller of the Currency (OCC) and the Federal Reserve have approved its applications to become a bank holding company through its proposed acquisition of Golden Pacific Bancorp, Inc. 

Sofi plans to operate its bank subsidiary as SoFi Bank, National Association. The company said it expects the acquisition to close in February.

“This incredible milestone elevates our ability to help even more people get their money right and realize their ambitions,” said Anthony Noto, CEO of SoFi. “With a national bank charter, not only will we be able to lend at even more competitive interest rates and provide our members with high-yielding interest in checking and savings, it will also enhance our financial products and services to ensure they efficiently meet the needs of our members, business partners, and communities across the country.

Active in refinancing student loans

Like many other fintech companies, consumers access Sofi's various financial services using an app. Many of its customers, like Gen, of Los Angeles, use Sofi to manage student loans.

“I transferred my student loan to Sofi because I was able to get a better interest rate and pay it down quicker,” Gen wrote in a ConsumerAffairs review. “The process was easy, the online management is great, and approval was very quick.”

The company also makes different types of loans, including personal loans. Luis, of Eatontown, N.J., told us he was approved for a $50,000 personal loan in fewer than three business days.

“My FICO score was good but not excellent,” Luis wrote in a ConsumerAffairs review. “I was even able to speak to a live human when I had a question. I did get a good rate compared to Lending Club or Prosper. The site itself is a pleasure to use.”

Among ConsumerAffairs reviewers, Sofi achieves a score of 3.7 stars in a 5-star rating system.

The move was expected

Sofi’s formal move into banking was well-telegraphed in advance. In 2021, the company announced a definitive agreement by its subsidiary Social Finance, Inc. to acquire Golden Pacific Bancorp, Inc. and its wholly-owned subsidiary Golden Pacific Bank, N.A. (GPB).

SoFi said it plans to contribute $750 million in capital and pursue its national, digital business plan while maintaining GPB’s community bank business and footprint, including GPB’s current three physical branches. 

With the approval of its move into banking, Noto says Sofi will be able to increase its portfolio of financial products and services for its customers.

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