Manatt Advises Fintech Pioneer Jiko in Its Historic Acquisition of National Bank

Manatt, Phelps & Phillips, LLP is pleased to announce it served as regulatory counsel to Jiko Group, Inc., headquartered in Berkeley, California, which today became the first fintech to complete the acquisition of a national bank—Mid-Central National Bank (formerly known as Mid-Central Federal Savings Bank), headquartered in Wadena, Minnesota. The transaction, which was approved by the Federal Reserve Bank of San Francisco and the Office of the Comptroller of the Currency, marks a significant milestone in Jiko’s mission to establish an entirely new model for how money is stored and moved between people and institutions. Jiko operates both a licensed bank and a licensed broker-dealer that transparently keeps its customers’ money invested in historically safe U.S. government-backed Treasury Bills (T-bills), which are liquidated when a person uses a debit card or withdraws cash from ATMs.

“The move by Jiko represents an important milestone in the maturity and evolution of fintech companies seeking to expand the reach of their products and services by becoming banks, buying or combining with a bank, or continuing to partner with banks in other ways,” said Brian Brooks, Acting Comptroller of the Currency. “It demonstrates the value and attractiveness of banks and in particular the federal banking system. While two data points don’t make a trend, the de novo charter granted to Varo Bank this summer and this acquisition by Jiko should demonstrate the optimism and positive energy for consumers, our economy and the federal banking system.”

Manatt worked side-by-side with Jiko from inception through numerous filings with and examinations by the regulatory agencies—navigating through multiple definitions of “control” applied by bank regulatory agencies—to structure this revolutionary transaction involving the convergence of fintech and banking. Working closely with Jiko’s securities counsel, Manatt helped Jiko preserve its dual-class, venture-backed capital structure while at the same time ensuring that only Jiko’s three individual co-founders were deemed to control the bank holding company. None of the key venture-capital investors were deemed to be control persons.

“We are proud to be part of this groundbreaking transaction and could not have done it without Agata Troy, counsel at Manatt,” said Barbara Polsky, General Counsel with Jiko and former partner with Manatt. “Agata’s contributions proved invaluable and, as excited as I am about joining Jiko, I am even more excited to watch her take the knowledge and experience we both gained through working together on this unique transaction to play a role in leading the Manatt Financial Services team—with its long and storied financial institutions practice that has naturally evolved into fintech—as it enters this new and exciting chapter.”

“We are proud to support Jiko in its journey to establish a new way to bank,” said Agata Troy, counsel with Manatt Financial Services. “This deal is a major landmark in the banking industry’s digital renaissance, and positions Jiko to build a universal and transparent money storage platform for all.”

Manatt’s financial services team of lawyers, consultants and technologists regularly counsels clients, ranging from fintech startups to brick-and-mortar banks, in a variety of complex transactional, regulatory and litigation-related matters at the intersection of innovation and the law.

“Agata Troy’s counsel perfectly demonstrates the type of complex, cutting-edge work we’re so proud to do on behalf of our clients,” said Donna L. Wilson, Manatt’s CEO and Managing Partner. “In particular, this transaction exemplifies the excellent work of our corporate and fintech teams in supporting the financial services industry’s digital transformation. The recent arrival of Marc Boiron and Rebecca Rettig, who bring to the firm extensive decentralized finance experience and clients, will further enable us to serve clients across our expanding platform. We are committed to helping our clients navigate and adapt to the increasingly innovative and evolving regulatory landscape, especially as it relates to issues involving the continued digitalization of our broader economy.”

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