The fintech Chime is nearing a deadline to stop implying that it operates as a bank, according to a settlement agreement with California regulators, American Banker reports.
The San Francisco-based company was using “chimebank” in its website address, allegedly in violation of a state law that is meant to prevent businesses from misleading the public, according to the California Department of Financial Protection and Innovation, which began an investigation last year.
Chime was also using the terms “bank” and “banking” elsewhere in its advertisements, the agency said in the March 29 settlement agreement.
Founded in 2013, Chime offers a fee-free, user-friendly banking app, which provides an accompanying debit card and auto-savings account.
The firm has taken advantage of the rise in digital banking during the pandemic and hit a $14.5 billion valuation in September off the back of a $485 million Series F funding round.
However, it is not licensed to operate as a bank in California or anywhere else, and instead works with partners that are licensed.
Despite this, until last February the company used the URL address „chimebank.com” and has also been using the words „bank” and „banking” elsewhere.
The Commissioner has been investigating Chime for possible violations of its rules that prohibit firms from „transacting ‘business in a way or manner as to lead the public to believe that its business is that of a bank’ without actual authority to engage in such business.”
A recent study from Cornerstone Advisors and StrategyCorps estimates that 12 million US consumers are now customers of Chime.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
