A successful application would have allowed the fintech to move further into the banking space independently. The withdrawal was reportedly voluntary and Robinhood has no plans to resubmit its application, per a spokesperson cited by CNBC.
This is another setback for the fintech's banking push. Robinhood first attempted to enter the banking space by launching checking and savings accounts with a 3% interest rate in December last year, but it had to quickly rebrand its offering to a cash management service — which was in October this year — after the Securities Investor Protection Corp explained that the customers' money would not be protected by it.
However, we think withdrawing the banking license application isn't all bad news for Robinhood. Here's why: Getting a banking license in the US has always been an ambitious goal. So far, challenger bank Varo Money is the only fintech to preliminary approval for a National Bank Charter from the OCC, in September 2018, and it still has to complete all of the OCC's conditions for the restrictions to be lifted.
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Source: BusinessInsider - 🏆 729. / 51 Read more »