LendingClub, a pioneer in marketplace lending in the first wave of fintech startups, has agreed to buy the online-only Radius Bank for a cash and stock transaction valued at $185 million in the first acquisition of a mainstream bank by a fintech company.
San Francisco-based Lending Club, which went public in 2014, matches borrowers with investors willing to fund their loans. Merging with Radius, a $1.4 billion-asset, Boston-based community bank, gives it a fast track to becoming a regulated deposit-taking company – allowing it to diversify its consumer banking services and ultimately its revenue stream.
There have been glimmers of action on this type of fintech-bank merger. In 2011 the prepaid debit card firm Green Dot, then valued at $1.3 billion, acquired the $37 million-asset Bonneville Bank in Utah. The buy did a lot for Green Dot's growth as it began to operate with more efficiency and innovation and to collect fees directly and introduce new products without waiting for the green light from its bank partner.
For many fintech startups, the road to obtaining a banking license has been a long and difficult process as they navigate the complexity of 50 separate state banking regulations. The Office of the Comptroller of the Currency had created a special purpose bank charter for fintech startups that allowed them to offer lending and payments products without providing FDIC insurance, or having to comply with 50 different chartering regimes; in October a New York judge ruled the OCC didn't have the authority to do that.
Square and SoFi have both withdrawn applications for a banking license to the FDIC, though Square has resubmitted its application. Last week, Varo Money received the first FDIC approval for a bank charter.
Jelena McWilliams, chairman of the Federal Deposit Insurance Corporation, told Cheddar in October that fintech companies present "healthy competition" to community banks.
"To the extent that community banks are able to innovate on their own and develop both technologies internally and partner up with some of these fintechs, I do believe that there can be a symbiotic relationship between the fintechs and the banks," McWilliams said.
"Community banks generally don't have the scale of larger banks to compete effectively in the marketplace or as effectively as the larger banks," she added. "If they can utilize the delivery channels and the products and services and agility of a fintech to reach their audience and consumers, I think they can have a prosperous relationship coexisting together."
The acquisition is expected to close in 12 to 15 months. CNBC first reported the deal Tuesday afternoon.
Joe Cecela, Dream Exchange CEO, explains how they are aiming to form the first minority-controlled company to operate an exchange in U.S. history. Watch!
A Michigan judge is putting sponges in the hands of shoplifters and ordering them to wash cars in a Walmart parking lot when spring weather arrives. Genesee County Judge Jeffrey Clothier hopes the unusual form of community service discourages people from stealing from Walmart. The judge also wants to reward shoppers with free car washes. Clothier says he began ordering “Walmart wash” sentences this week for shoplifting at the store in Grand Blanc Township. He believes 75 to 100 people eventually will be ordered to wash cars this spring. Clothier says he will be washing cars alongside them when the time comes.
The State Department had been in talks with Elon Musk’s Tesla company to buy armored electric vehicles, but the plans have been put on hold by the Trump administration after reports emerged about a potential $400 million purchase. A State Department spokesperson said the electric car company owned by Musk was the only one that expressed interest back in May 2024. The deal with Tesla was only in its planning phases but it was forecast to be the largest contract of the year. It shows how some of his wealth has come and was still expected to come from taxpayers.
At 100 years old, the Goodyear Blimp is an ageless star in the sky. The 246-foot-long airship will be in the background of the Daytona 500 — flying roughly 1,500 feet above Daytona International Speedway, actually — to celebrate its greatest anniversary tour. Even though remote camera technologies are improving regularly and changing the landscape of aerial footage, the blimp continues to carve out a niche. At Daytona, with the usual 40-car field racing around a 2½-mile superspeedway, views from the blimp aptly provide the scope of the event.
You'll just have to wait for interest rates (and prices) to go down. Plus, this deal's a steel, the big carmaker wedding is off, and bribery is back, baby!
It’s a chicken-and-egg problem: Restaurants are struggling with record-high U.S. egg prices, but their omelets, scrambles and huevos rancheros may be part of the problem. Breakfast is booming at U.S. eateries. First Watch, a restaurant chain that serves breakfast, brunch and lunch, nearly quadrupled its locations over the past decade to 570. Fast-food chains like Starbucks and Wendy's added more egg-filled breakfast items. In normal times, egg producers could meet the demand. But a bird flu outbreak that has forced them to slaughter their flocks is making supplies scarcer and pushing up prices. Some restaurants like Waffle House have added a surcharge to offset their costs.
William Falcon, CEO and Founder of Lightning AI, discusses the ongoing feud between Elon Musk and Sam Altman, and how everyday people can use AI in their lives.
