A fintech called Jiko has acquired a federal savings association, Mid-Central Federal Savings Bank in Wadena, Minn., which is converting to a national bank.
Acting Comptroller of the Currency Brian Brooks confirmed that his agency has approved the deal.
“The move by Jiko represents an important milestone in the maturity and evolution of fintech companies seeking to expand the reach of their products and services by becoming banks, buying or combining with a bank, or continuing to partner with banks in other ways,” he said in an emailed statement.
The Jiko bank acquisition and the de novo charter that federal regulators granted to Varo Bank this summer “should demonstrate the optimism and positive energy for consumers, our economy and the federal banking system,” Brooks said.
The acquisition is one of the few transactions of its kind. Green Dot bought Bonneville Bancorp in Provo, Utah, in December 2011 for $15.7 million in cash, and renamed it Green Dot Bank. LendingClub agreed in February of this year to buy Radius Bank in Boston for $185 million in cash and stock; that deal is still pending. The price of the Jiko deal was not disclosed.
Jiko offers a mobile app through which users can open a bank account (through Mid-Central) and have that money automatically invested in U.S. Treasury bills. According to its app and website, Jiko plans to offer a debit card.
The fintech was founded in 2016 by Stephane Lintner, a former Goldman Sachs trader. In 2017, Lintner and his 23-person team set up an office in San Francisco and a development center in Iceland, where Jiko started developing its own technology.
In 2018, Jiko began a partnership with Mid-Central Federal Savings Bank. It also joined Financial Industry Regulatory Authority and the Securities Investor Protection Corporation as a broker-dealer member. Jiko raised money and met with bank regulators.
On Aug. 19, the Federal Reserve Bank of San Francisco approved Jiko’s application to become a bank holding company by acquiring Mid-Central Federal Savings Bank.
