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San Jose, California - December 16, 2025.
PayPal Holdings Inc. has taken a bold step toward deeper integration into the traditional banking system, announcing Monday that it has applied to establish a Utah-chartered industrial loan company dubbed PayPal Bank.
The move, submitted to the Federal Deposit Insurance Corp. (FDIC) and the Utah Department of Financial Institutions, comes as the Trump administration's pro-innovation regulatory stance encourages fintech and cryptocurrency firms to pursue bank charters.
If approved, PayPal Bank would allow the payments pioneer to directly offer loans and FDIC-insured deposits, reducing its dependence on third-party banking partners and expanding services for small businesses.
Key Takeaways
- Application filed for Utah ILC: PayPal seeks to create PayPal Bank for direct lending and FDIC-insured deposits.
- Small business emphasis: Builds on $30B+ in historical loans, aiming for more efficient capital access.
- Regulatory environment shift: Benefits from 2025's pro-fintech stance under Trump administration.
- New leadership and products: Mara McNeill appointed president; plans for interest-bearing savings.
- Industry trend: Joins crypto firms and others in charter surge for greater independence.
A Push to Empower Small Businesses
PayPal CEO Alex Chriss emphasized the application's focus on addressing financing challenges for entrepreneurs.
"Securing capital remains a significant hurdle for small businesses striving to grow and scale," Chriss said in a statement. "Establishing PayPal Bank will strengthen our business and improve our efficiency, enabling us to better support small-business growth and economic opportunities across the U.S."
Since 2013, PayPal has originated more than $30 billion in loans and working capital to over 420,000 business accounts worldwide, often through partnerships like WebBank.
A charter would streamline these operations, lower costs, and enable new products such as interest-bearing savings accounts with FDIC insurance.
The company has also appointed Mara McNeill, former president and CEO of Toyota Financial Savings Bank, as the proposed president of PayPal Bank. McNeill brings over 25 years of experience in banking and commercial lending.
Riding a Wave of Regulatory Tailwinds
The timing of PayPal's application aligns with a surge in charter pursuits following President Trump's return to office in 2025. Regulators have adopted a more permissive approach, contrasting with the prior administration's caution.
Recent examples include preliminary approvals for national trust bank charters to cryptocurrency firms such as Circle, Ripple, Paxos, BitGo, and Fidelity Digital Assets.
Non-fintech players like Nissan Motor's financing arm and Sony Group have also sought similar charters.
Industrial loan companies (ILCs), particularly those chartered in Utah, are attractive to fintechs because they allow deposit-taking and lending without full oversight under the Bank Holding Company Act.
PayPal already holds a banking license in Luxembourg and has integrated crypto features, including its PYUSD stablecoin. A U.S. charter could further blend these elements into regulated banking services.
Broader Implications for Fintech and Competition
Industry experts see PayPal's bid as part of a maturing fintech sector converging with traditional banking. Approval could enhance competition in small-business lending and deposits, potentially lowering costs for merchants and consumers.
The application process involves thorough reviews by regulators, with no set timeline for decision. PayPal has pledged close collaboration with authorities.
A small business owner using digital payment tools, illustrating PayPal’s focus on empowering entrepreneurs.
As fintech giants like PayPal push boundaries, the development underscores 2025's deregulatory trends fostering innovation while integrating emerging technologies.
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FAQs:
1. What exactly is PayPal applying for?
PayPal has applied to form PayPal Bank, a Utah-chartered industrial loan company (ILC), enabling direct loans, deposits, and potential card network membership.
2. Why now for a U.S. bank charter?
The application leverages a more favorable regulatory climate in 2025, reducing reliance on partners and expanding small-business services.
3. What is an industrial loan company (ILC)?
A state-chartered institution (popular in Utah) that can accept deposits and make loans but avoids some federal banking oversight.
4. How does this help small businesses?
It streamlines access to financing, building on PayPal's $30B+ lending history for faster, lower-cost capital.
5. When could approval happen?
Timelines vary; reviews by FDIC and Utah regulators may take months or longer.
6. Is this tied to PayPal's cryptocurrency efforts?
Indirectly, PayPal supports PYUSD and crypto, but the focus is on traditional lending and deposits amid broader fintech-crypto charter activity.
7. What changes for existing PayPal users?
If approved, potential new offerings like insured savings accounts and enhanced lending independence.
Disclaimer:
This content is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice; no material herein should be interpreted as a recommendation, endorsement, or solicitation to buy or sell any financial instrument, and readers should conduct their own independent research or consult a qualified professional.
