Skip to content
Opinion
Matt Levine

Robinhood Checking Moved Fast and Broke

Also Goldman and 1MDB, prop trading and sovereign crypto.

Last Thursday, Robinhood Financial LLC announced a new product called “Robinhood Checking & Savings,” which would allow anyone to open a deposit account with no-fee ATM access, a debit card, insurance from the Securities Investor Protection Corp. and a 3 percent interest rate. We talked about it on Friday morning. Robinhood is not a bank, so it can’t issue checking or savings accounts, and anyway the SIPC doesn’t insure checking and savings accounts, so it was all a bit weird. I assumed, perhaps foolishly, that Robinhood, uh, has some lawyers, and that they had thought about this and figured out a way to do it legally. For instance, Robinhood can’t issue a “checking account,” or a “savings account,” since those are things only banks can do, but “checking & savings” is technically neither of those things and so perhaps it falls into a gray area. “A magic ampersand,” I called it.

Well, no. By Friday afternoon the head of the SIPC had told reporters that SIPC would not insure the accounts, and had reported Robinhood to the Securities and Exchange Commission. And by Friday evening Robinhood Checking & Savings was no more. The web page announcing the product is gone, and Robinhood’s website now contains a very-slightly-chastened-for-a-fintech “Letter From Our Founders” walking back the whole thing. “We plan to work closely with regulators as we prepare to launch our cash management program,” says Robinhood, now, “and we’re revamping our marketing materials, including the name.” The magic ampersand did not save them.