PayPal is accepting deposits. Institutions that accept deposits from the public are supposed to have either a state or a national charter and should be subject to the same regulatory processes as a commercial bank. That means that they should have FDIC coverage as well.
If PayPal can get by with this and WalMart can accept funds from the public on its prepaid card, then why should a commercial bank be subject to all of the regulations. It seems as if one would just have to remove itself from the FDIC coverage, turn in the charter and keep on going on.
If the PayPals and Walmarts can operate without a charter and FDIC coverage, and the public continues to use them, then what value is the charter, and why subject your bank to the volumes of regulations and examinations being endured?
Alfred Kreps
The State Bank
