US OCC Grants VALT Conditional Charter for Digital SMB Banking

The Office of the Comptroller of the Currency has granted conditional national charter approval to VALT, a digital-only business banking startup led by a group of former U.S. Bank executives. The conditional approval positions VALT to operate as a fully licensed national bank named Valt Bank National Association, enabling it to conduct banking operations across all US states under federal supervision.

VALT positions itself as a fully digital business bank offering integrated banking, payments and credit, distinguishing itself from legacy banks running decades-old technology and from fintech competitors without balance sheets, Banking Dive reported.

REGULATORY MILESTONE FOR FINTECH

Proposed chief executive Matt Gediman told Banking Dive that regulators "have made new bank formations a priority, and specifically innovation a priority." The conditional nature of the approval means VALT must satisfy specific requirements before opening, including raising $25 million.

VALT is led by proposed chief executive Matt Gediman, proposed executive chair John Elmore, a former U.S. Bank vice chairman, and proposed vice chair Ross Carey, a former U.S. Bank executive.

IMPLICATIONS FOR SMB BANKING

VALT is targeting traditionally operated small and midsize businesses that want technological sophistication from their financial provider, according to Banking Dive.

Once VALT satisfies its conditional requirements and opens, it plans to meet businesses' banking, payments and credit needs on a single digital platform. The bank intends to serve digitally demanding SMBs, targeting those with $2 million to $10 million in annual sales. Once it secures final approval and begins operating, VALT will be required to maintain a 9% tier 1 leverage ratio for its first three years of operations.

PATHWAY TO LAUNCH

The conditional approval, granted on March 13, came "120 days on the button" after VALT submitted its application, Gediman said. VALT was projected to open at the end of the third quarter, Banking Dive reported.