Photo Illustration: Sarah Grillo/Axios. Photo: Burhaan Kinu/Hindustan Times via Getty Images

Jack Dorsey's Square, the upstart payment processor for smaller merchants, got the OK to open a bank, after nearly three years of trying.

Why it matters: Square applied to set up an industrial loan company — a "lite" bank that isn't subject to Federal Reserve supervision — which hasn't been approved in more than a decade. It may open the floodgates for companies that want all the perks of being a bank without the same amount of oversight.

Driving the news: Square Financial Services, as the fintech's bank is to be called, will be based in Utah, and — when it opens in 2021 — will collect deposits and lend money to merchants that use Square devices.

  • The approval comes at a crucial time for Square, as many of its customers are the kind of small businesses that have been forced to shutter because of the coronavirus.

The conditions placed on Square — by the FDIC and the Utah Department of Financial Institutions — are way tougher than those of typical banks. But they are still answering to fewer regulators.

  • Its initial capital level will be $56 million, "significantly higher" levels of capital than other banks, per the FDIC.
  • The FDIC will also have the right to examine Square Financial Services' parent company.

Of note: The FDIC signed off on educational company Nelnet's request to launch a bank.

What they're saying: "Nonbanks have always wanted deposit insurance," Thomas Vartanian, a longtime banking lawyer who heads a financial regulatory institute at George Mason University’s Antonin Scalia Law School, tells Axios.

  • "If you can take deposits at a very low cost, that's an enormously cheap way to fund yourself," he says, as opposed to regular companies that go into the markets and borrow money at more expensive rates.

The bottom line: Applications like Square's caused an uproar in the banking industry more than a decade ago. Remember when Walmart tried to be a bank? Traditional banking institutions howled about the potential consolidation of power in a single company.

  • But Square's approval marks the beginning of a friendlier approach, reopening the doors for other tech companies to open their own banks.

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

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  2. U.S.: Total confirmed cases as of 3 a.m. ET: 6,764,962 — Total deaths: 199,258 — Total recoveries: 2,577,446 — Total tests: 94,211,463Map.
  3. Politics: In reversal, CDC again recommends coronavirus testing for asymptomatic people.
  4. Health: The dwindling chances of eliminating COVID-19.
  5. World: Guatemalan president tests positive for COVID-19 — The countries painting their pandemic recoveries green.

The positions of key GOP senators on replacing Ruth Bader Ginsburg

Senate Majority Leader Mitch McConnell talks to reporters on Capitol Hill last Thursday. Photo: Chip Somodevilla/Getty Images

With President Trump planning to nominate his third Supreme Court justice nominee by next week, key Republican senators are indicating their stance on replacing the late Justice Ruth Bader Ginsburg just over six weeks out from Election Day.

The big picture: Senate Majority Leader Mitch McConnell (Ky.) has vowed that "Trump’s nominee will receive a vote on the floor of the United States Senate." But Sen. Lisa Murkowski (Alaska) told Alaska Public Media, "I would not vote to confirm a Supreme Court nominee. We are 50 some days away from an election."

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ActBlue collects a record $91 million in hours after Ginsburg's death

A makeshift memorial in honor of Justice Ruth Bader Ginsburg in front of the U.S. Supreme Court on Sept. 19. Photo: Samuel Corum/Getty Images

ActBlue received a record $91.4 million in the 28 hours following Supreme Court Justice Ruth Bader Ginsburg's death, the Democratic donation-processing site confirmed to Axios late Saturday.

Why it matters via the New York Times: "The unprecedented outpouring shows the power of a looming Supreme Court confirmation fight to motivate Democratic donors."