An online lender that chooses who to lend to very carefully will now get the chance to select applicants from all 50 states after action by the federal government.
Jim Cramer heard from Anthony Noto, CEO of SoFi Technologies (SOFI), the online lender that saw its shares soar 13.6% after receiving regulatory approval to become a national bank.
A national bank is chartered under the federal government and is a member of the Federal Reserve System.
Noto told Cramer on a recent episode of "Mad Money" that he got very emotional after receiving word from the Federal Reserve that SoFi's banking application had been approved. The application process involves a lot of regulatory hurdles and hard work, which makes this approval represent a huge milestone for SoFi as a company.
SoFi's mission is to be a partner in all of their customers' most important financial milestones, and now with the ability to offer checking and savings accounts, they can offer new services as well as gain the ability to lower costs at the same time, Noto said.
Last month, Real Money's Doug Kass initiated a position in SoFi at $12.10.
SoFi currently offers four different types of loans, Noto said, and since they only lend to high-quality applicants, their loan performance to date has been far better than traditional banks. With the banking approval, SoFi will now be able to offer products in all 50 states, up from just 40 states today.
