The marketplace lender's application for an industrial bank charter is under fire from small banks and progressives, who say it could violate the barrier between banking and commerce and shut out middle-class and lower-income consumers.
ESSA Bank & Trust has successfully worked with a federal program that helps former prisoners in some eastern Pennsylvania towns get back into society, and it plans to expand the program to the Philadelphia market.
The online lender, which focuses on high-earning millennials, is offering assurances that it will also serve Americans who make less money. But the company has not convinced critics, who say the plans are inadequate.
The Treasury secretary says the Trump administration doesn't support separating commercial from investment banking; wealthy neighborhoods are designated as low-income, benefitting banks with branches there.