If you want to build a next-generation consumer banking app, and then use it to attract retail deposits, you don't actually need to be a bank.
Simple in Portland, Ore., has proven that over the last couple of years. By partnering with Bancorp Bank, the technology startup has been able to forego acquiring its own charter, while still providing deposit insurance to its customers.
But Simple has bigger ambitions
On Monday, Karkal and Chief Executive Officer Josh Reich took to Twitter to hash out, in an extraordinarily public conversation with tech investors, the pros and cons of Simple's various options.
The discussion started when Reich jumped into a conversation that Silicon Valley legend
@pmarca @rabois @cdixon there are decent federal charters out there for <$20m. Problem is FDIC approval timing. Faster to go MSB route.
Josh Reich (@i2pi) February 10, 2014
Karkal replied:
@i2pi @pmarca @rabois @cdixon disadvantage is that MSB limits your options, especially on the lending side.
Shamir Karkal (@shamir_k) February 10, 2014
He added:
@i2pi @pmarca @rabois @cdixon add up 50 state lending licenses, and 46 state MSB licenses, and it's easier to just deal with the FDIC.
Shamir Karkal (@shamir_k) February 10, 2014
Reich then shot back:
@shamir_k @pmarca @rabois @cdixon Let's split $20m and have a race :)
Josh Reich (@i2pi) February 10, 2014
At that point, Reuters finance blogger Felix Salmon took note of the conversation's unusual forum.
Awesome: @simple 's CEO and CFO having a public Twitter discussion about whether its worth it to buy a bank pic.twitter.com/EXamfo9n2S
felix salmon (@felixsalmon) February 10, 2014
Reich got the last word:
@felixsalmon The worst part is that @shamir_k and I are sitting in the same room.
Josh Reich (@i2pi) February 10, 2014
