Square's Bank App With Federal Deposit Insurance Corp (FDIC) Is Withdrawn

On July 5th, Square Inc officially withdrew their application to open a new bank depository, also adding, they would refile later this year with the Federal Deposit Insurance Corp. But the application with Utah’s Department of Financial Institutions would remain active.

The new information was first released by American Banker, which took notice to Square pulling out their application, as it was no longer listed on those pending. A spokesperson at Square also stated that the company had removed their application after having discussions with the FDIC – making intentions to rebuild the already existing application prior to refiling later.

“We have been engaged in constructive dialogue with the FDIC, and our decision to withdraw and refile was a procedural step in the review process that will allow us to amend and strengthen some areas of our FDIC insurance application.”

Square has had plenty of oppositions from the Independent Community Bankers of America, who had sent a letter to the FDIC last Fall, in protest of the application. The financial organization made warnings against large commercial and technology firms taking ownership of FDIC-issued LLCs.

The San Francisco, California-based company who is run by Jack Dorsey (CEO) has been able to uphold a massive goal to help smaller businesses – not any revival community-based banks. The spokesperson also made other statements on Thursday, addressing the situation:

“Square Capital is uniquely positioned to build a bridge between the financial system and the underserved, and we continue to work closely with the FDIC and Utah DFI on our applications.”

New Cash App Leads To A Bank Application

The plans to establish a bank were made immediately following the successful release of Square’s Cash App, that launched in 2015 – with Bitcoin trading following in early 2018. Dorsey went on to explain that even though his intention was different, the application quickly became the go-to bank account for many. He was excited to follow up first hand, further exploring the trend.

Square Cash App soon hit another milestone in June, in which financial regulators in New York gave Square the licensing for cryptocurrency trade in the state.

Dorsey also made statements on his desire to learn more on the blockchain technology being used as the base operations platform for the system, stating he wanted to make sure Square helped create a permanent adoption of BTC. He said:

“The internet is going to have a native currency, so let’s not wait for it to happen, let’s help it happen.”

Even through there has been continually success, Square has a lot of work ahead of themselves before the FDIC will accept them. They are in no position to take the situation lightly, as Square could become the first LLC in almost ten years to get approved by the organization.

What are your thoughts on Square withdrawing their banking application? Let us known in the comment section below.

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