Credit card startup Mission Lane received preliminary conditional approval from the Office of the Comptroller of the Currency to establish Mission Lane Bank, National Association — the first new OCC-regulated credit card bank in more than 20 years.
The bank will operate under limitations established for credit card banks under the Competitive Equality in Banking Act of 1987 (CEBA). CEBA-chartered institutions are narrow in scope, covering exclusively credit card operations, and avoid Federal Reserve oversight.
Mission Lane must raise $35 million of initial paid-in capital within 12 months and maintain a tier 1 leverage ratio of at least 11% throughout its first three years of operation.
With a CEBA charter, Mission Lane would no longer need to rely on partner banks TAB Bank and WebBank to originate and hold loans. The company focuses on subprime credit card lending for consumers with limited access to traditional banking services.
The OCC has committed to turning around charter applications within 120 days under the current regulatory posture.