Magazine article American Banker

Digital Lender to Offer Checking with Monthly Membership Fee

Magazine article American Banker

Digital Lender to Offer Checking with Monthly Membership Fee

Article excerpt

Byline: Kevin Wack

The online consumer lender MoneyLion plans to start offering checking accounts, part of its strategy to become a financial hub for U.S. households stung by bank fees.

The checking account will not carry overdraft fees or a minimum balance requirement, and customers will have access to a large network of ATMs.

But in order to open an account, consumers will have to pay a $29 monthly fee to join MoneyLion's membership program. Members of the program also have access to investment products, loans with annual percentage rates of 5.99% and the opportunity to earn $1 per day in rewards by logging into the company's mobile app.

MoneyLion's goal is to become the key financial provider in its customers' lives.

"We are core believers in the rebundling of the bank," Tim Hong, the New York-based company's chief marketing officer, said in a recent interview.

Other digital lenders are also trying to build broader relationships with their customers, in large part because it is much less expensive to sign up borrowers who have an existing account than it is to acquire new customers.

Social Finance, the San Francisco-based online consumer lender, offers investment products and is rolling out a checking account this spring. SoFi's customers tend to be well-heeled professionals who have used the company's student loans to refinance existing education debt at a lower interest rate.

MoneyLion is targeting a less affluent demographic. The 5-year-old company sees an opportunity to offer a consistently priced checking account. …

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