San Francisco-based Square, which offers card readers and a payments app, has confirmed to CU Times that is has filed an application for an industrial loan charter with the FDIC. 

The company is the latest in a string of fintechs to make the move toward bank status. Lending fintech SoFi and mobile-banking personal finance startup Varo Money have also applied for bank charters recently. Those companies are also based in San Francisco.

“The primary purpose of the bank will be to offer business loans to small businesses, similar to the existing business of Square Capital, and to offer deposit products,” a company spokesperson told CU Times. Square’s average loan size is $6,000, and the company said it is often a substitute for business loans from friends and family rather than banks.

Brian Kaas, who is managing director at CUNA Mutual Group’s venture capital arm, CMFG Ventures, said credit unions can’t ignore the bigger issue at hand.

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