Fintech buys Wadena savings bank, converts to national charter

The Jiko Group, Inc., a California-based fintech, has acquired Wadena-based Mid-Central Federal Savings Bank and has converted it to a national bank charter: Mid-Central National Bank. The transaction was approved by the Office of the Comptroller of the Currency and the Federal Reserve Bank of San Francisco.

The deal marks a major milestone in Jiko’s strategy to establish a new model for money storage and movement, the company stated in a news release. That new model involves keeping customers directly invested in liquid U.S. government-backed Treasury Bills instead of holding customer deposits. 

“The past decade of fintech and online banking innovations has exposed new customers to our industry and demonstrated that innovation in the financial sector is needed,” said Stephane Lintner, CEO and co-founder of Jiko, based in Berkeley. “People’s relationship to money must be fundamentally improved for everyone. One of Jiko’s primary goals is to give people what they deserve: More organic and direct returns, without intermediaries and unnecessary friction.”

The national bank charter is a key factor in assessing the business model, said ICBM President and CEO Jim Amundson. “Innovative banking models aren’t something to fear. As I understand it, the company will be subject to the same rules and regulations as any national bank.”

Jiko offers customers a mobile app through which people can automatically invest in T-bills, according to a report by the American Banker, which said the fintech was formed in 2016. “Thanks to Jiko’s proprietary technology, an investment can act as a liquid and spendable alternative to cash,” the company stated. “Over the last three years, Jiko has invested heavily in its core infrastructure, which merges payment rails with real-time, 24/7 principal trading capabilities on T-bills. Jiko’s technology stack, combined with the recently acquired banking and broker-dealer licenses, are the necessary building blocks to deliver on its core mission of deploying a platform that gives everyone the opportunity to control and benefit from their money.”

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