Robinhood applies for national bank charter in bid to form new challenger bank

Mobile stock trading-app Robinhood is seeking a national bank charter with the Office of the Comptroller of the Currency, S&P Global writes. If the company receives a bank charter, besides providing securities trading, it could also roll out banking services as a Robinhood Markets subsidiary.

"This is a first step towards being granted a national bank charter which would allow Robinhood to offer traditional banking products and services," the company wrote.

Last year, Robinhood planned to offer a checking and savings account backed by the Securities Investor Protection Corp (SIPC). However, the SIPC said it would only secure funds for securities purchases, not cash deposits, which caused Robinhood to detract its plans. 

Former CEO of Wedbush Bank, Scott Racusin, who joined Robinhood last year has been nominated as the proposed president of the new challenger bank. Currently, Robinhood's cash management features are said to be "coming soon."