California-based mobile payments company Square has withdrawn its application to open depository bank but said that it plans re-file again.
The company has withdrawn the application submitted to the Federal Deposit Insurance (FDIC), however, its application with the State of Utah Department of Financial Institutions remains active.
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Square submitted its application to FDIC for a special ‘industrial loan company (ILC)’ licence that would have enabled it to collect government-insured deposits.
Trade journal American Banker first reported the development when the company’s ILC request did not feature in the list of pending applications.
Square representative was quoted by Reuters as saying: “We have been engaged in constructive dialogue with the FDIC, and our decision to withdraw and re-file was a procedural step in the review process that will allow us to amend and strengthen some areas of our FDIC insurance application.”
Following the submission of the ILC application, Square faced opposition from trade group Independent Community Bankers of America which advocated the implementation of uniform rules and regulations on all fintech firms as applicable on conventional banks.
The company was founded in 2009 and the first app and service were introduced in the following year.
Besides marketing multiple software and hardware payments products, Square entered into small business services through different products.
