For now, to aid those having trouble paying bills during the coronavirus pandemic, Chime will let 100,000 people take out $200 they don’t actually have.
There will be some criteria for this. Recipients have to have already been users of the bank and have paychecks regularly deposited there. People must have received at least $250 in paycheck deposits in the last 34 days. The bank’s standard minimum is usually $500, but it decided to lower that amount because of the boundless number of people without jobs due to the pandemic’s effects on the economy.
Those interested in the benefits must have already filed a 2019 tax return and received a refund deposited directly into their Chime account.
Chime tested the initiative last week, offering a cash advance of up to $1,200 for 1,000 people. About 500 of them participated and took out amounts ranging from $150 to $300 on average. CEO Chris Britt, seeing how that worked out, decided to expand the program. He said there is “certainly some risk” to doing this, but it is a risk Chime is comfortable taking.
It’s risky because the $200 won’t count as a loan, and the bank will have no options in the case that it isn’t paid back. The bank also does not report delinquencies to credit bureaus. The standard amount for Chime cash advances is $45 to $100.
Britt said the company hasn’t been hurt by the pandemic. He said Chime was able to hire “five or six people” last week, and March had been the best month in the bank’s history in terms of transaction volume and revenue.
Chime was recently valued at $6 billion after a venture capital boost of $700 million. The bank had 3.3 million users in 2019.
Some Americans may actually start receiving their stimulus money this week, either Thursday (April 9) or Friday (April 10).