PayPal Bank Charter Aims to Expand Small-Business Lending
PayPal applied Dec. 15 for a PayPal Bank charter in Utah to add FDIC-eligible savings and expand small-business lending, cutting partner-bank reliance.
KEY TAKEAWAYS
- Submitted applications to Utah and the FDIC to establish PayPal Bank as a Utah-chartered industrial loan company.
- Charter would let PayPal internalize deposits, offer FDIC-eligible savings, and expand small-business lending and merchant credit.
- Applications are under review with an unknown timeline and PayPal plans to work closely with regulators.
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PayPal Holdings Inc. said in a press release on Dec. 15, 2025, that it submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) to establish PayPal Bank, a Utah-chartered industrial loan company (ILC). The charter would allow PayPal to expand small-business lending and reduce reliance on external bank partners.
Applications Filed for PayPal Bank
The filing states the charter would enable PayPal to extend merchant credit and merchant-acquiring services, offer FDIC-eligible, interest-bearing savings products to consumers and merchants, and pursue direct card-network membership. This structure would allow deposit-taking and lending without the full restrictions of a bank-holding-company framework.
The applications are under review by Utah regulators and the FDIC. PayPal said it will work closely with these agencies throughout the process.
Lending Scale, Leadership, and Precedents
PayPal currently originates its U.S. loans through WebBank, based in Salt Lake City. Since 2013, it has originated $30 billion in global loans to more than 420,000 business accounts, which the company cited as a foundation for expanding direct deposit and credit services.
Mara McNeill, formerly president and CEO of Toyota Financial Savings Bank, was named president of PayPal Bank.
The filing follows prior Utah ILC precedents, including Block Inc.’s 2020 charter, and complements PayPal’s existing private-bank relationships with Merrick Bank, Comenity Capital Bank, and WebBank. Together, these moves signal PayPal’s strategic effort to internalize deposit and lending capabilities as part of its broader expansion of small-business financial services.
