Each week, Steve is breaking down what’s happening in fintech banking with the kind of clarity you get from someone who’s lived through board debates, pricing standoffs, and product launches that either scaled or crashed. This isn’t surface-level commentary. It’s the real story behind sponsor bank partnerships, embedded finance moves, and BaaS programs that most people only hear about after they’ve already succeeded or failed.
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Four fintechs moved toward owning their charters between September 8 and September 11, and the agencies proposed retiring the guidance written for the model they are leaving Chime decided seven years of sponsor fees cost more than owning Stride. Nu decided the opposite and opened U.S. accounts on Lead Bank while its national bank file is still unfinished. Mercury received conditional deposit insurance and still cannot take a deposit in its own name until $300 million of capital shows up and the Fed signs off on the holding company. The September 11 third-party proposal gives community banks room to stop rebuilding the same binder on every vendor, and it puts cores that lock contracts in the examiner's notes. No partner mix supports a revenue forecast longer than the partner intends to stay. |
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Chime, Nu, Mercury, and Block Each Chose a Different Exit From the Partner Bank Model |
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The fintech stopped paying rent. Chime Agrees to Buy Stride, Putting Every Program Bank's Largest Client on the Table Client concentration got a public valuation on September 9. Chime announced September 8 that it agreed to acquire longtime partner Stride Bank for $590 million in cash. Chime expects a first-half 2027 close, subject to OCC and Federal Reserve approval, and plans to rename the institution Chime Bank, N.A. For banks serving a comparable client, the immediate question is which revenue depends on services that client intends to bring in-house.
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The Bancorp closed at $64.41 on September 8 and fell about 21 percent the following session. Nothing changed in its own results or guidance that day.
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Chime projects more than $100 million in net synergies from sponsor fees, expanded lending, and lower funding costs. That total does not identify the fees any individual bank could lose.
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Consolidation is Chime’s stated intention. No transfer date for any account or service has been announced.
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Chime becomes a bank holding company under the Bank Holding Company Act at closing, which brings Federal Reserve supervision with it.
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Chime says it intends to keep bank assets below $10 billion for the foreseeable future. That figure is the Durbin exemption threshold, though the release does not name Durbin as the reason.
For sponsor banks: Model the interval between a decline in program revenue and the point at which the associated costs can actually be removed. For fintechs: A purchase agreement and a de novo application are different timelines with different capital profiles. |
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Open first. Charter later. Nu Launches in the U.S. Through Lead Bank Lead Bank has gained a U.S. banking relationship with a company already pursuing its own national charter. Nu announced its U.S. launch on September 10, with banking services provided by Lead. Nu received conditional OCC approval in January and says the partner model allows it to serve customers and gather feedback while its charter process continues. What matters commercially is whether the relationship earns an adequate return over its actual duration.
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Nu’s account launched with a stated 3.50 percent APY. Deposit growth assumptions need to account for the cost and variability of that offer.
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The announced services include a credit card and transfers to Brazil, Mexico, and Colombia, creating several operating responsibilities from the start.
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Nu’s more than 140 million customers are its Latin American customer base. None of them are Lead Bank accounts.
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A conditional approval carries no schedule for moving services off the partner, and no commitment that all of them move.
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Onboarding expenses, minimum commitments, and migration support belong in the same commercial review. A shorter relationship can still be worthwhile when those terms support it.
For sponsor banks: If a partner has a pending national bank file, set a deposit cap and a written off-ramp now. For fintechs: Connect the sponsor agreement to the opening plan, including responsibility for service continuity if approvals or migration take longer than expected. |
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Insured on paper. Not open for business. Mercury Receives Conditional FDIC Insurance; Choice and Column Still Hold the Book Mercury Bank, N.A. is closer to a charter and no closer to taking deposits in its own name. The FDIC listed a September 8 action for the Salt Lake City applicant under certificate 59388. The OCC gave preliminary conditional approval April 24. The Fed still has the holding-company file. Paid-in capital to open is $300 million. Until final OCC authorization, customer funds stay at Choice Financial Group and Column N.A., with Patriot Bank issuing the IO Card. The charter letter says the bank anticipates transitioning customers from Mercury’s bank partners during the de novo period. Plan the exit on the public calendar. Refuse any briefing that treats insurance as an opening date.
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FDIC conditions include capital, missing executive backgrounds, prior approval for control changes, and a full parent shareholder list.
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Zelle, deeper lending, and owned payments are the stated reasons for the charter. Those products appear after opening.
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$300 million is the number that separates a de novo from a business plan. A shop that cannot post it stays a program.
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Column and Choice already carry a dense fintech book. A future departure of Mercury balances is a liquidity event even when it is planned.
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Preliminary approval carries a clock. The April 24 letter sets 12 months to raise capital and 18 months to open, which makes October 24, 2027 the outside opening date.
For sponsor banks: Build a weekly deposit waterfall for Mercury balances and agree statement language for the move. For fintechs: Conditional FDIC plus conditional OCC is two approvals and no authority to take insured deposits in the applicant’s name. For compliance teams: Keep pass-through insurance and customer-of-record files current. Dual control during a future migration is where the breaks start. |
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No deposits. No loans. No insurance. Block Seeks a National Trust Charter, Requiring Partners to Identify Which Services Could Change Banks assessing Block’s application need to isolate their custody exposure. On September 8, Block announced that it had submitted an OCC application for Builders Bank & Trust, N.A., an uninsured national trust bank. The proposed institution would provide custody and related fiduciary services, including for bitcoin and stablecoins. Its stated scope excludes deposit-taking and lending, so it tells a partner nothing about Block’s other banking relationships.
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Approval would place the proposed activities under OCC supervision. Block has filed. The OCC has not ruled.
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The proposed bank would carry no deposit insurance. Customer descriptions must accurately reflect the services and protections offered.
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Block describes a consistent national supervisory framework as a purpose of the charter.
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Existing experience with Square Financial Services informs Block’s proposal; this application concerns a separate institution and business scope.
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A partner review needs to identify the specific services Builders could replace and the services Block would continue to purchase.
For sponsor banks: Assess exposure by activity and legal entity before attaching a revenue estimate to the charter headline. For compliance teams: An uninsured trust charter changes the applicable framework. The diligence burden stays where it was. |
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The 2024 deposit guidance is on the rescission list. Agencies Propose New Third-Party Guidance and Put Core Processors on Notice Community banks got room to match the vendor file to the harm. On September 11 the OCC, FDIC, Fed, and NCUA asked for comment on principles-based third-party risk guidance. Non-binding. When finalized, current interagency third-party guidance gets pulled. Comments are due 60 days after Federal Register publication. The same package includes a statement on community banks and cores that block diligence, freeze contracts, or withhold monitoring data. Fintech Business Weekly reads that statement as aimed at FIS, Fiserv, and Jack Henry. High-volume payments partners still sit at the top of the risk list. Write the comment. Rewrite the inventory.
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The agencies say the 2023 guidance was read in an overly broad way and unintentionally incentivized process-driven approaches that fail to prioritize higher-risk relationships. The stated goal is examiners focused on material financial risk instead of check-the-box exercises.
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Fed Governor Michael Barr cast the lone no on September 9, objecting to a material financial risk standard for supervisory action.
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The core statement is the useful page for community banks. The proposed guidance separately notes that banks report keeping third parties that cannot deliver best-in-class service, have breached contract terms, or charge above market.
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A new section covers co-ventures, consortia, and standard-setting organizations. Banks could rely on shared due diligence, standard contract templates, and third-party certifications from a standards body, which arrives alongside reporting that the FDIC is working with banking and fintech trade groups to create one.
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This is a proposal. Exam staff will use the 2023 playbook until a final replaces it.
For sponsor banks: Split vendors into core, payments, and low-harm software. Put the high-harm list in front of the board this month. For fintechs: Expect fewer theatrical packets and more questions about residual loss and who files the SAR. For compliance teams: File a comment and ask, in plain words, how a BaaS program is scored versus a core. |
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Being the bank of record protects nothing Scale programs got tired of paying sponsor fees and waiting on another bank’s product committee. Chime spent $590 million to stop doing both, and The Bancorp lost about a fifth of its value on the news without a single number of its own changing. Mercury received insurance it cannot use until $300 million lands, Block filed for a charter that takes no deposits at all, and Nu opened on Lead Bank holding an approval it has not exercised. On September 11 the agencies proposed retiring the 2024 deposit guidance and floated letting banks share diligence through a certification body. Cap single-program deposits, put migration language in the agreement, and file the third-party comment while the window is open. Add a transition-cost schedule to the next concentration report, with an owner and an assumption for each expense that remains after program revenue declines. I’d give the transition-cost column a little more room in the board packet. |
Takeaway:
A fintech’s need for banking services does not guarantee its continuing need for your banking services.
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From The Source For those of you wanting a more in-depth look at the articles (and the links to them...)
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Chime Announces Agreement to Acquire Stride Bank | September 8, 2026 Chime Financial agreed to acquire Stride Bank, N.A. for $590 million in cash, renaming it Chime Bank, N.A. and becoming a bank holding company after a first-half 2027 close, subject to OCC and Federal Reserve approval. Chime expects more than $100 million in net synergies from sponsor bank fee savings, lending expansion, and lower funding costs, and said it will keep assets below $10 billion.
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Chime to buy Stride Bank for $590M | September 8, 2026 Banking Dive covered the transaction and noted that The Bancorp Bank has been Chime’s other bank partner, alongside chief executive Chris Britt’s earlier comment that a Chime charter was a question of when rather than whether.
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Why Is The Bancorp Stock Down 21% Today? | September 9, 2026 The Motley Fool reported The Bancorp trading down roughly 21 percent the session after Chime announced the Stride acquisition, tying the move to Chime’s stated plan to consolidate banking activities at Stride and the resulting question over fee income from its largest program relationship.
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Agencies Seek Comment on Proposed Third-Party Risk Management Guidance and Issue Statement on Community Bank Engagement with Core Service Providers | September 11, 2026 The OCC, FDIC, Federal Reserve, and NCUA proposed principles-based third-party risk management guidance that would replace existing interagency guidance when finalized, and issued a joint statement on how they will treat core service providers that limit community bank diligence, monitoring, or contract terms. Comments are due 60 days after Federal Register publication.
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Joint Statement on Community Banks’ Engagement with Core Service Providers | September 11, 2026 The agencies acknowledged that a small number of large providers hold much of the core services market, leaving community banks with limited ability to obtain diligence information, negotiate contract terms, or conduct effective ongoing monitoring, and set out the factors they will weigh in supervisory and enforcement decisions when those constraints apply.
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Regulators propose new guidance on core providers | September 11, 2026 American Banker reported the proposal would apply more supervisory oversight to core service providers over transparency, contract structures, and technology components, and quoted Federal Reserve Governor Lisa Cook on a principles-based, risk-focused approach.
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Regulators Move To Rescind Post-Synapse Risk Guidance, Lay Groundwork For Fintech Standards | September 13, 2026 Fintech Business Weekly traced the proposal back through the BaaS enforcement wave that began with Blue Ridge Bank in 2022, confirmed that the July 2024 joint statement issued after the Synapse collapse sits among the documents to be replaced, and flagged a new section on co-ventures, consortia, and standard-setting organizations that would let banks rely on shared due diligence and third-party certifications.
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Mercury gets FDIC nod | September 10, 2026 Banking Dive reported Mercury received conditional deposit insurance approval more than 260 days after applying, with initial paid-in capital of $300 million required before Mercury Bank, N.A. can open, plus background submissions for proposed senior executive officers and a complete parent company shareholder list.
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OCC Corporate Decision #1372, Mercury Bank, N.A. | April 24, 2026 The OCC granted preliminary conditional approval for a full-service, insured national bank in Salt Lake City with no branch presence, requiring initial paid-in capital of no less than $300 million and a Tier 1 leverage ratio of at least 10.0 percent through the first three years. The approval expires if capital is not raised within 12 months or the bank does not open within 18 months. Jonathan Auxier is approved as chief executive officer, with Immad Akhund, Tim Mayopoulos, and Lewis Goodwin among the approved directors.
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Block Applies to Establish Builders Bank, a National Trust Bank | September 8, 2026 Block filed with the OCC to establish Builders Bank & Trust, N.A., an uninsured national trust bank providing custody and fiduciary services for bitcoin and stablecoins that would not accept deposits or make loans, with Lee Woolley proposed as president and chief executive officer.
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Nu takes next step in international expansion with launch in the US and introduction of Nu Global | September 10, 2026
Nu Holdings opened U.S. consumer banking through FDIC-insured Lead Bank with a 3.50 percent APY account, a no-annual-fee Mastercard carrying 1.5 percent cashback, and fee-free transfers to Brazil, Mexico, and Colombia, while its OCC national bank charter, conditionally approved in January 2026, remains in process. |
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