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

Biden: The next president should decide on Ginsburg’s replacement

Joe Biden. Photo: Drew Angerer / Getty Images

Joe Biden is calling for the winner of November's presidential election to select Ruth Bader Ginsburg's replacement on the Supreme Court.

What he's saying: "[L]et me be clear: The voters should pick the president and the president should pick the justice for the Senate to consider," Biden said. "This was the position the Republican Senate took in 2016 when there were almost 10 months to go before the election. That's the position the United States Senate must take today, and the election's only 46 days off.

Trump, McConnell to move fast to replace Ginsburg

Photo: Alex Wong/Getty Images

President Trump will move within days to nominate his third Supreme Court justice in just three-plus short years — and shape the court for literally decades to come, top Republican sources tell Axios.

Driving the news: Senate Majority Leader Mitch McConnell and Senate Republicans are ready to move to confirm Trump's nominee before Election Day, just 46 days away, setting up one of the most consequential periods of our lifetimes, the sources say.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 10 p.m. ET: 30,393,591 — Total deaths: 950,344— Total recoveries: 20,679,272Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 6,722,699 — Total deaths: 198,484 — Total recoveries: 2,556,465 — Total tests: 92,163,649Map.
  3. Politics: In reversal, CDC again recommends coronavirus testing for asymptomatic people.
  4. Health: Massive USPS face mask operation called off The risks of moving too fast on a vaccine.
  5. Business: Unemployment drop-off reverses course 1 million mortgage-holders fall through safety netHow the pandemic has deepened Boeing's 737 MAX crunch.
  6. Education: At least 42% of school employees are vulnerable.