PayPal Files for PayPal Bank Formation in the US, Focuses on Small Business Financing

Illustration (photo: Unsplash)

JAKARTA - PayPal Holdings, Inc. announced that it has applied to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation, to establish PayPal Bank in the US.

This entity is proposed as an industrial loan company (ILC) that will operate under a Utah state charter.

PayPal Bank will enable PayPal to provide business lending solutions more efficiently to small businesses in the US, while reducing dependence on third parties and strengthening PayPal's business.

"The establishment of PayPal Bank will strengthen our business and increase our efficiency, allowing us to better support the growth of small businesses and economic opportunities across the US," said PayPal President and Chief Executive Officer Alex Chriss.

In addition to providing small business loan solutions, the presence of PayPal Bank is also expected to offer customers interest-bearing savings accounts.

PayPal Bank will also seek to become a direct member in the US with a card network to complement processing and settlement activities through existing banking relationships.

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If approved by regulators, customer deposits at PayPal Bank will be eligible for FDIC insurance protection.

PayPal also appointed Mara McNeill as President of PayPal Bank. McNeill has more than 25 years of experience in the financial services sector, including banking, commercial lending, and private equity, and previously served as President and CEO of Toyota Financial Savings Bank.