Brex’s proposed bank is a setback for Revolut’s team building in the U.S.
- Brex has applied for an industrial bank license.
- Management conflicts of interest may impact Revolut's U.S. efforts.
Brex wants to be a bank.
What's happening: The corporate card issuer submitted an application with the FDIC last week to establish an industrial bank in Utah. The proposed Brex Bank would offer credit solutions and deposit products to Brex's SMB clients.
The interesting bit: As part of the application, Brex put forward Bruce Wallace as its proposed CEO. Wallace previously served as chief operating officer, chief digital officer, and head of global services at Silicon Valley Bank.
“Brex and Brex Bank will work in tandem to help SMBs grow to realize their full potential,” said Wallace in the firm's press release announcing its application. “We thank the FDIC and UDFI for their efforts and guidance in this process and look forward to the next steps.”
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Conflicts of interest: But in April 2020, Wallace was brought in by competitor Revolut as a board member in the U.S. After dozens of months of planning its launch, Revolut went deep into the banking industry for talent and guidance, bringing Wallace onboard along with current CEO Ronald Oliveira, who also has decades of experience in banking.
Revolut ended up launching in the U.S. in March 2020 without a bank license in partnership with Metropolitan Commercial Bank.
Tearsheet has learned that Revolut has since terminated Wallace's directorship as he prepares to lead Brex into banking. Revolut has had a hard time hanging on to compliance talent, losing its head of regulatory compliance, Chris Sing, last year after a tenure of under two years at the challenger bank. The bank also faced an inquiry by the FCA in 2016 after a whistleblower voiced concerns over the firm's anti-money laundering practices.