PayPal applies to become a US bank — filings with the FDIC and Utah

PayPal has submitted applications to form a U.S. bank, filing with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions (UDFI). The move would establish “PayPal Bank” (chartered in Utah if approved) and allow the company to offer interest‑bearing savings accounts and other banking services.

The company says it has provided more than $30 billion in loans and working capital to over 420,000 business accounts globally and frames the bank application as a way to improve access to capital for small businesses. PayPal already operates as a bank in Europe (Luxembourg), but a U.S. charter would broaden its ability to take deposits and offer bank products directly.

Why PayPal wants a bank charter

• Better capital & deposits: Becoming a bank would let PayPal take customer deposits, potentially lowering funding costs and giving it a steadier source of capital to support lending to small businesses.
• New consumer products: PayPal plans to offer interest‑bearing savings accounts and other bank‑like services, expanding its product set beyond payments and lending.
• Operational control: Owning a bank charter can simplify regulatory relationships and reduce reliance on partner banks for core functions.

Regulatory context

Applications to become a bank have become more common this year. Under current U.S. policy changes, the Office of the Comptroller of the Currency (OCC) has recently granted conditional approvals to several crypto firms seeking national trust charters. Other corporations—including Nissan and Sony—have also filed bank applications. If approved, PayPal would be chartered at the state level in Utah and overseen by federal and state regulators.

Potential implications

• For consumers: PayPal could offer deposit accounts, potentially improving convenience and integration with its payments platform — but customers should watch for terms, interest rates and fee structures.
• For small businesses: Easier access to working capital or deposit products tailored to merchants could be beneficial, depending on underwriting and pricing.
• For the banking sector: New fintech banks increase competition, which may spur innovation but also raises questions about regulatory oversight, consumer protections and systemic risk.

What to watch next

• FDIC and Utah DFI progress updates and any public comment or approval timelines.
• Details on product design: interest rates, insurance, and how PayPal will integrate bank accounts with its existing wallet and merchant services.
• Regulatory responses and whether similar fintech applications gain faster approval or face additional scrutiny.

Further reading: Engadget coverage. For general information about FDIC oversight see FDIC, and for Utah chartering details visit the Utah Department of Financial Institutions.

Discussion: Would you trust a fintech like PayPal with bank accounts — or do you prefer traditional banks? What services would make you switch?