[duxup]

>Square Banking

>Square, Inc. is a financial services company, not a bank. Banking services are provided by Square’s banking affiliate, Square Financial Services, Inc. or Sutton Bank; Members FDIC.

Um so they are insured by the FDIC?

Am I doing business with Square, Square Financial Services, Inc., or Sutton Bank?

Do I have any recurse when it comes to typical banking expectations / rules here when it comes to either of the three companies I may or may not be using?

[zonethundery]

Square Financial Services is a Utah-chartered industrial loan company (ILC) with FDIC insurance [0]. Savings deposits go here.

Checking accounts are at Sutton Bank (partner bank). I assume the split is driven by Square Financial's three-year supervisory plan w/ FDIC and the mechanics of getting square off chase/wells card rails. Green dot did something similar by purchasing a chartered bank.

[0] https://www.fdic.gov/regulations/laws/bankdecisions/depins/s...

[afavour]

Sutton Bank is a real bank with full FDIC insurance. Seems like Square Banking is just a pretty UI on top of that.

[mattanimation]

This really reminds me of how Simple was actually just a layer on top of BBVA who then ended up closing Simple and now BBVA has merged with another bank and is changing again.

[tadfisher]

Simple started out as a layer on top of The Bancorp Bank (TBBK), and we intended to support multiple backing accounts before the merger with BBVA.

[hestefisk]

Sutton Bank is the deposit taking institution and therefore wear the customer / deposit risk. Pretty much everything from the payment rails and up appears to be Square.

[twobitshifter]

Fidelity offers cash management accounts fdic insured up to $1M. They do this by “sharding” your account across multiple fdic banks.

[Bhilai]

> Um so they are insured by the FDIC?

Says on the website - "Your account(s) are FDIC-insured up to $250K"

[ww520]

That’s a really good question. In the event of an insolence, can you as a customer of Square get through to the real banks in the back? Would the banks treat you as their own customer and fulfill their FDIC obligation?

[thebean11]

Yes usually the backing account is in the end user's name in these schemes.

[athorax]

You might hit some recurse trying to get through their phone menu