OCC denies Bunq's 'insufficient' charter application

• Key insight: Bunq, a Dutch neobank attempting to enter the U.S. digital banking market, had its charter application denied by the OCC on Friday.
• What's at stake: This is the second denial of a fintech bank charter request from the agency as it is scrutinizing recent applications.
• Forward look: Bunq has not declared whether it will apply for a third time, but the decision letter allows for that as a possibility.

The Amsterdam-based neobank Bunq's U.S. banking charter application was denied by the Office of the Comptroller of the Currency even as the agency has approved multiple other fintech requests to become banks this year so far.

The decision is the second of its kind for a fintech charter application from the agency in the past month, with the first being its denial of Wise's de novo charter request due to AML compliance concerns.

In a decision letter posted Friday afternoon, the OCC cited lack of experience in U.S. credit and banking regulation among the bank's proposed directors, lack of support for initial capitalization requirements and insufficient details in Bunq's business plan for achieving and maintaining profitability.

"In light of these deficiencies, the Application does not demonstrate that bunq US Bank can be operated in a safe and sound manner," the letter read.

The company said in a statement that "the OCC shared its decision not to approve bunq's U.S. banking license this time around. Of course, we would have loved a yes, but we also knew we had chosen one of the hardest routes into one of the toughest banking markets in the world."

In the statement, Bunq acknowledged that the OCC wanted to see a plan more specifically built for the U.S. banking market, with greater demonstrated experience in the products it wants to offer and more detail on its financial structure.

"We'll do what we always do: listen, adapt and keep moving forwards," the statement continued. "Our path might change, but the destination does not."

Dylar Lerner, senior digital banking analyst at Javelin Strategy and Research, told American Banker that the OCC issuing public denials shows that it isn't being indiscriminate with its charter decisions.

"It is willing and ready to approve fintech applications, provided that they meet the agency's standards," he said.

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Bunq originally applied for a de novo bank charter in January of this year, two years after withdrawing its previous attempt.

The Dutch digital bank, a competitor of the U.K.-based fintech Revolut in Europe, is a subscription-based service that allows users to manage multiple international accounts and currencies in one application. The company is aiming to reach European "digital nomads" residing in the United States. 

Bunq had previously secured a broker-dealer license from the Financial Industry Regulatory Authority, or FINRA, and a banking license would have been its next step into the U.S. financial market.

"We thank the OCC for their feedback," the statement continued. "The U.S. is a market our users care about, and everything we do is for them. Our journey continues with our approved broker-dealer license while we work through the OCC's feedback."

The company has not declared whether it will apply for a third time or what the next step is for entering the U.S. banking market, but indicated in its statement that it is willing to explore other options in the future. The OCC decision letter noted that "the denial of the application does not prohibit the filing of a de novo charter application in the future."

"If at first you don't succeed you pick yourself up and try again, and giving up isn't in our blood," the statement read. "It isn't in the spirit of the country we want to serve, either. We'll keep working to bring the full bunq experience to the U.S.A."