Chime’s $590M Stride Deal Raises a $10 Billion Question

Chime is taking a major step toward becoming a bank holding company with a $590 million deal to acquire Central Service Corporation, the parent company of Stride Bank.

The cash transaction is subject to certain adjustments, Chime announced. If the deal closes, Stride, a nationally chartered bank, will become Chime Bank, N.A., and operate as a wholly owned subsidiary of Chime.

Though the agreement is new, Chime and Stride Bank are by no means strangers to one another. Stride has issued Chime debit accounts since December 2019.

Brud Baker, Chairman and CEO of Stride Bank, said Chime’s focus on its members and mission gives him confidence in what the companies can accomplish together.

Chime says owning a bank will help it develop products faster by combining its technology with Stride’s banking infrastructure. The company says that combination could accelerate the development of its financial products, including lending products.

Chime indicated that artificial intelligence is already helping the company build products faster. It said adding a subsidiary bank charter should further streamline the development of products that meet regulatory requirements.

BadCredit.org asked Adam Rust, Director of Financial Services at the Consumer Federation of America, what the deal could mean for Chime. Rust said the acquisition would bring a significant shift in Chime’s responsibilities.

“The transition from fintech to bank isn’t just an operational change,” Rust told us. “It is also a mindset shift. Traditionally, regulators have expected banks to be the adults in the room. That expectation now falls on Chime.”

Chime says its strategy and business model will remain the same, though it has not fully detailed how the acquisition could affect customers or its existing banking partnerships.

Chris Britt, CEO and Co-Founder of Chime, said the company would remain focused on its members and continue using technology to drive its strategy.

“This acquisition will make our proven model even stronger,” Britt said. “By combining Chime’s leading brand and deep member relationships with Stride’s national charter and team, we will accelerate toward our vision to be the largest provider of primary bank accounts in America.”

Britt’s vision for Chime is ambitious, particularly when weighed against a detail nestled within the company’s acquisition announcement: Chime plans to keep its assets below $10 billion “for the foreseeable future.”

By comparison, JPMorgan Chase Bank and Bank of America have assets measured in trillions, not billions, of dollars.

Roman Goldstein, a Senior Director at Klaros Group, a financial services advisory firm, told BadCredit.org that Chime likely plans to remain below $10 billion to avoid the Durbin Amendment’s cap on debit card interchange fees.

Regulation II’s interchange limits generally do not apply to a debit card issuer and its affiliates with less than $10 billion in total assets. Chime did not identify the Durbin Amendment as its reason for staying below the threshold.

BadCredit.org asked Chime via email how it intends to become the country’s largest provider of primary bank accounts while keeping its assets below $10 billion. The company did not provide additional details and directed us to its acquisition announcement for its full statement.

Goldstein also shared his take on Chime’s motivation for the purchase.

“Chime gets greater control over its product set, but it will also be responsible for complying with the gamut of bank regulations and supervisory expectations spanning consumer protection, affiliate relationships, meeting community credit needs, liquidity management, and more,” Goldstein said.

“Buying a bank rather than creating a new one helps: Chime will acquire the personnel familiar with these rules and the systems that already comply with them,” he added.

The transaction is subject to approval by the Office of the Comptroller of the Currency and the Federal Reserve Board, along with other customary closing conditions. Chime expects the deal to close during the first half of 2027.

If the acquisition is completed, Chime will become a bank holding company and face additional regulatory requirements and oversight.

The acquisition also raises questions about what will happen to Stride’s existing relationships with other financial technology companies as the bank shifts its focus primarily toward Chime’s consumer business.