SoFi Granted Bank Charter

Digital finance firm SoFi Technologies was granted approval to become a national bank pending its acquisition of Golden Pacific Bancorp (GPB), according to a press release on Wednesday (Jan. 19).

Both the Office of the Comptroller of the Currency (OCC) and the Federal Reserve (Fed) accepted SoFi’s applications to become a Bank Holding Company and form SoFi Bank, National Association. SoFi’s acquisition of GPB is anticipated to close next month.

Shares of SoFi’s stock surged over 16% in after-hours trading following the announcement, according to several media outlets.

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“This incredible milestone elevates our ability to help even more people get their money right and realize their ambitions,” said Anthony Noto, CEO of SoFi, and former co-head of TMT investment banking at Goldman Sachs, ex-chief operating officer at Twitter, and former chief financial officer for the NFL.

“This important step allows us to add to our broad suite of financial products and services to better be there for our members during the major financial moments in their lives and all of the moments in between.,” Noto said.

He added that having a national bank charter will enable SoFi to boost interest rates and expand products to “ensure they efficiently meet the needs of our members, business partners, and communities across the country while continuing to uphold a high bar of regulatory standards and compliance.”

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SoFi’s journey to being granted a national bank charter started last year when its subsidiary Social Finance closed a deal to acquire GPB and its wholly-owned subsidiary Golden Pacific Bank, N.A. SoFi is backing the deal with $750 million in capital and will support GPB’s business, including its three physical branches.

Once the acquisition of GPB is completed, SoFi Technologies will become the parent company of SoFi Bank, National Association.

Headquartered in Silicon Valley and launched in August 2011, SoFi is a digital services firm offering its three million members student loan refinancing, mortgages, personal loans, credit cards, investing and banking.