Let's play ... Who Wants To Be a Bank!

Ahmad Akram (0:01)

NPR.

Wailin Wong (0:06)

This is The Indicator from Planet Money, I'm Waylon Wong.

Ricky Mulvey (0:09)

I'm Ricky Mulvey, but Waylon, this isn't The Indicator. What? This is Who Wants to Be a Bank?

Wailin Wong (0:17)

Ah, that's right! This is the game show where financial technology companies vie for a shot at a US banking license.

Ricky Mulvey (0:26)

There are all these companies out there that do stuff with our money, but are technically not banks. Payment apps, crypto firms, buy-now-pay-later companies. They don't have banking licenses, but they want them. And the Trump administration and its regulators want to grant them. In fact, they've already approved more new banks this year than in all of 2025

Wailin Wong (0:48)

Today on the show, why do so many fintech companies want to be banks, and what does it take to get there? Find out today on Who Wants to Be a Bank?

Ricky Mulvey (1:02)

The games will begin after this word from our sponsor.

Wailin Wong (1:10)

Welcome back to Who Wants to Be a Bank? It's the game show where financial technology companies undergo a grueling process in hopes of winning a coveted banking license and some other goodies.

Ricky Mulvey (1:22)

To explain what's at stake here, we're going to bring on stage Michelle Ault. She's a co-founder of a firm called the Clarus Group. It advises fintechs on becoming banks.

Wailin Wong (1:32)

Are you like the fintech whisperer?

Michelle Ault (1:34)

Well, I like to think of myself as the regulatory whisperer. My jam is helping non-banks and fintechs navigate the very perplexing and cumbersome and Byzantine process of getting a bank license in the US.

And that involves quite a bit of whispering to the regulators and sometimes shouting.

Wailin Wong (1:59)

Sounds exciting! And Michelle tells us she's been busy lately. That's because one of the main bank regulators in the US has announced that it is once again open for business. It's said there were years in which very few new banks got approved, and now it wants more fresh faces to increase competition in the industry.

Ricky Mulvey (2:17)

And what's in it for the fintechs? Michelle says these companies want greater access to the US financial system, even if it comes with more regulatory scrutiny.

Michelle Ault (2:26)

It's sort of like, oh, encumber me, please, encumber me. Um, I love encumbrance.

Wailin Wong (2:33)

So what are these prizes waiting at the end of the regulatory rainbow? Michelle, tell them what's behind door number one.

Michelle Ault (2:42)

Wait, Lynn, they've won deposit insurance. Yay!

Ricky Mulvey (2:47)

That's right. This prize is furnished by the Federal Deposit Insurance Corporation, or FDIC. The government backstopped some types of customer deposits up to $250,000.

Having this insurance lowers the operating costs for banks. They can collect deposits instead of relying on private, more expensive sources of funding.

Wailin Wong (3:07)

Now, there are different kinds of bank licenses in the US. Most banks get the FDIC backstop. For other types, there are additional upsides. What's behind door number two, Michelle?

Michelle Ault (3:20)

Wait, there's more. They also get access to the Fed discount window.

Ricky Mulvey (3:25)

That's the ability to borrow money from the Federal Reserve. Very useful in emergencies. All right, let's open door number three.

Michelle Ault (3:35)

And the biggest grand prize of all, a Fed master account.

Wailin Wong (3:43)

This is a bank's account at the Federal Reserve. It allows a bank to talk to other banks and process payments.

Michelle Ault (3:49)

This is a critical, critical communication and payment system provided by the Fed. If you don't have that, you don't have a lot. You are not a real bank, like Pinocchio became a real boy.

Ricky Mulvey (4:03)

So these are the fabulous prizes, and now it's time to meet today's contestant on. Who wants to be a bank?

Ahmad Akram (4:12)

I'm Ahmad Akram, co-founder and CEO of Mercury.

Wailin Wong (4:15)

Ahmad, welcome to Who Wants to Be a Bank?

Ricky Mulvey (4:20)

Woo, woo indeed.

Ahmad co-founded his company Mercury in 2017 It caters to startups and small businesses, and it offers checking accounts, a credit card, and short-term loans.

Wailin Wong (4:33)

Now, you might hear that and think, sounds an awful lot like a bank, but Mercury is technically not a bank. Instead, it partners with other banks. These relationships give Mercury access to, for example, federal deposit insurance.

Ricky Mulvey (4:47)

Ahmad says he needed these partnerships at the beginning because he was new to banking, but he always wanted Mercury to eventually become a full-fledged bank.

Ahmad Akram (4:56)

There's definitely things that we want to do that we can't do because we're not a bank.