Get the latest market trends in your inbox

Stay on top of the latest market trends and economic insights with the Axios Markets newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Annelise Capossela/Axios

Varo Money, one of many upstart challenger banks, received its bank charter effective Aug. 1.

Why it matters: The benefits for Varo Bank (as it can now officially be called) are obvious. Varo now controls its own deposits, and can use them to fund loans; it also has a lot more freedom to innovate, now that it doesn't need to work within a partner bank's APIs.

  • Because Varo has a national bank charter (unlike Square, which is chartered in the state of Utah), it no longer has to worry about being in compliance with 50 different state financial regulators. One federal charter is all it needs.

The benefits for the rest of us are that a large and fast-growing financial player (CEO Colin Walsh tells Axios that Varo's deposits have trebled over the course of the pandemic) is now subject to full regulatory scrutiny.

What they're saying: "Innovation is happening outside the bank charter today," says Brian Brooks, acting comptroller of the currency and Varo's new regulator. "That creates some amount of risk to the financial system. As incentives have grown for people to operate financial services companies in a specialty way, it has become harder for bank supervision to monitor risks."

What's next: Now that the dam has broken, expect more national charters in relatively short order — within the next year or so. SoFi could be next.

  • While it took more than three years for Varo to get its charter, SoFi's is likely to come more quickly. "The early pioneers had to take covered wagons over the Rockies," Brooks tells Axios. "Now we take a plane flight."

Go deeper

What banks' booming profits say about the economy

Illustration: Sarah Grillo/Axios

Some of America's biggest banks are making more money now than they were before the pandemic hit.

Why it matters: Quarterly earnings out this week hint that the worst economic scenarios haven't yet come to pass. Still, executives are warning there could be a rocky road ahead for the economy.

Philanthropy Deep Dive

Illustration: Aïda Amer/Axios

A look at how philanthropy is evolving (and why Dolly Parton deserves a Medal of Freedom).

Updated 6 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Politics: Fauci says he accepted Biden's offer to be chief medical adviser "on the spot" — The recovery needs rocket fuel.
  2. Economy: U.S. economy adds 245,000 jobs in November as recovery slows — America's hidden depression: K-shaped recovery threatens Biden administration.
  3. Education: Devos extends federal student loan relief to Jan. 31
  4. States: New Mexico to allow hospitals to ration coronavirus medical care
  5. Vaccine: What vaccine trials still need to do.
  6. World: UN warns "2021 is literally going to be catastrophic"
  7. 🎧 Podcast: Former FDA chief Rob Califf on the vaccine approval process.