Ramp’s Application for a National Trust Bank
Ramp, a corporate payments platform, has recently sought authorization to establish a national trust bank in the United States. This application was lodged with the Office of the Comptroller of the Currency (OCC) on October 16, 2023, with the goal of initiating Ramp National Trust Bank, as announced by the company on October 19.
Proposed Services and Regulatory Strategy
If granted, this charter would empower the proposed bank to provide services related to fiduciary investment management alongside custody solutions for digital assets. However, it’s noteworthy that Ramp has clarified that the institution will not engage in traditional banking activities such as accepting customer deposits or offering commercial loans.
This move towards applying for a trust bank charter is aligned with Ramp’s broader strategy to integrate its financial services under a unified federal regulatory umbrella. The company anticipates that with the new charter, it can enhance its offerings, allowing them to collaborate with current banking partners while developing innovative financial products.
Currently, Ramp operates its business checking and investment services through third-party financial institutions, where funds are subject to differing regulatory conditions. For instance, checking accounts are serviced by the First Internet Bank of Indiana, an FDIC member, while investment accounts are managed by Ramp Advisory LLC in conjunction with Moment Advisors.
Current Financial Standing and Future Plans
As of October 20, Ramp disclosed that it is managing over $5 billion in customer funds across various accounts, although this amount should not be misconstrued as assets in the proposed digital asset custody services, which have yet to be approved. Ramp has not announced which specific digital assets it plans to incorporate into this framework or the timing for the potential launch of Ramp National Trust Bank.
Industry Trends and Regulatory Landscape
This charter application follows recent trends in the financial industry where multiple firms, including Rain National Trust Bank and Kraken’s parent company Payward, are also pursuing federal approvals for digital asset custody-related services. The OCC’s public records show this growing interest among digital asset companies, illustrating a proactive shift towards establishing regulated environments for digital financial services.
Following guidance from the OCC, which clarified that national banks and federal savings associations can engage in certain cryptocurrency custody and execution services, the landscape for digital asset-related banking is evolving. Meanwhile, the regulatory authority is facing a lawsuit from the Independent Community Bankers of America, questioning the jurisdictional authority granted to national trust banks for activities beyond traditional fiduciary roles.
Company Growth and Future Considerations
Despite the backdrop of legal challenges, Ramp’s co-founders have touted the company’s substantial growth, highlighting a valuation of $60 billion, dealings with 85,000 entities, and an annual revenue exceeding $2 billion, alongside a claim that users are collectively saving over $1 billion each month.
As Ramp navigates the approval process for its national trust bank application, it remains unclear how the forthcoming services will specifically cater to existing clients versus new institutions, nor is there clarity on the types of digital assets that will be included. For now, Ramp will await the OCC’s decision on its application, which does not currently have a public comment period established.
