OCC Gives Mission Lane Conditional OK For Rare Credit Card Bank Charter
By CU Today Staff —
RICHMOND, Va.— Credit card provider Mission Lane has received conditional approval from the Office of the Comptroller of the Currency to establish a national credit card bank, in what an adviser to the company said would be the first new OCC-regulated credit card bank in more than 20 years.
The OCC’s Sept. 25 decision conditionally approved the charter for Mission Lane Bank, National Association, five months after the company applied.
The limited-purpose charter falls under the Competitive Equality Banking Act of 1987, or CEBA, and would allow Mission Lane to issue and hold its own credit card loans rather than relying on its current bank partners, TAB Bank and WebBank. CEBA credit card banks are restricted primarily to credit card operations and generally cannot accept demand deposits or savings and time deposits of less than $100,000, except when used as collateral for secured credit card loans.
Klaros Group, which advised Mission Lane on the application, said the approval is the first of its kind in more than two decades. Klaros told American Banker that its research found the most recent previous CEBA credit card bank was Department Stores National Bank, approved in 2005 and later merged into Citibank in 2022. Mission Lane said the charter could allow it to expand beyond its current 45-state footprint and eventually transition its nearly 3 million customers to cards issued directly by Mission Lane Bank.
The OCC is requiring Mission Lane Bank to raise at least $35 million in initial paid-in capital within 12 months and maintain a Tier 1 leverage ratio of at least 11% during its first three years. Conditional OCC approval is not the final step: Mission Lane must satisfy preopening requirements, including obtaining Federal Deposit Insurance Corp. approval for deposit insurance, before the bank can begin operations.
Originally reported by CU Today.