STATE OF ILLINOIS
DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION
DIVISION OF BANKING
SPRINGFIELD, ILLINOIS
In the Matter of
CHIME FINANCIAL, INC.
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SETTLEMENT AGREEMENT
AND CONSENT ORDER
2021-DB-01
I.
RECITALS
A. Chime Financial, Inc. (“Chime”) is a financial technology company that partners
with certain banks (“Banking Partners”) to provide consumer-oriented banking products. Chime
is incorporated in Delaware with headquarters in San Francisco, California and an office in
Chicago, Illinois.
B. The State of Illinois (hereinafter referred to as the “State”) has agreed, through its
applicable state regulatory agency, the Department of Financial and Professional Regulation –
Division of Banking, to negotiate and enter into this Settlement Agreement and Consent Order
(hereinafter referred to as the “Agreement”) with Chime. Together, the State and Chime will be
referred to as the “Parties”.
C. The Illinois Department of Financial and Professional Regulation – Division of
Banking (“DOB”) licenses and regulates state-chartered banks (205 ILCS 5/1 et seq.) in Illinois.
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Furthermore, Section 46 of the Illinois Banking Act (the “Act”) (205 ILCS 5/46) prohibits any
person or entity that is not a bank from transacting business in Illinois in a manner which has the
substantial likelihood of misleading the public by implying that the business is a bank and
prohibits any person or entity that is not a bank from using the words “bank,” “banker” or
“banking” in connection with the business without the prior approval of DOB.
D. At all relevant times herein, Chime did not have and does not have licensure to
operate as a bank in Illinois or any other jurisdiction nor did Chime have approval of DOB to use
the words “bank,” “banker” or “banking” in connection with its business.
E. In 2020, the State commenced an inquiry of Chime for apparent violations of the
State’s law, as noted above, governing Chime’s use of the term “bank,” “banker” and “banking”
in the course of Chime’s business.
F. As a result of such inquiry, the State is of the following opinions:
1. The State finds that Chime’s use of the URL address of “chimebank.com” is
in violation of Section 46 of the Act.
2. In addition, the State alleges that Chime’s usage of the words “bank” and
“banking” in certain other aspects of Chime’s business violates Section 46 of
the Act.
G. Chime has cooperated with the State’s inquiry, has represented that it is willing to
work with regulatory agencies for the benefit of consumers, and has agreed to comply with the
State’s law. While neither admitting nor denying the State’s findings and allegations, Chime
agrees to comply this Agreement, as outlined below under “II. TERMS AND CONDITIONS”.
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II.
TERMS AND CONDITIONS
1. Purpose. This Agreement resolves the issues before the State in a manner that
avoids the business disruption and expense of a hearing and other possible court proceedings,
protects consumers, is in the public interest, and is consistent with the purposes, policies, and
provisions of the applicable law.
2. Cease and Desist. The Acting Director of the Department of Financial and
Professional Regulation – Division of Banking hereby orders Chime, and Chime agrees that in
accordance with Section 46 of the Act, Chime will cease and desist from using the name
“chimebank.com” in its business unless and until it becomes licensed or otherwise authorized
to engage in the business of banking under the laws of any state or of the United States. Chime
agrees that the Order to Cease and Desist is hereby deemed a final order.
3. Chime’s Review of its Webpage and Advertising. Chime agrees to perform the
following review and make changes to its webpage, mobile app, and advertising by May 15,
2021. Chime agrees to perform quality control and testing of such changes by June 15, 2021
and promptly thereafter make further changes to address any exceptions identified. Chime
agrees as follows:
a. Chime shall distance itself from use of the term “banking” and its derivatives by
clarifying statements on its website, on its mobile app, and in advertising to
address the following:
i. Where “banking” terminology is used, Chime shall place a disclosure
stating that Chime is not a bank, and banking services are provided by
Chime’s Banking Partner(s). The disclosure shall be in bold and/or
increased font size in a clear and conspicuous manner proximate to the use
of the “banking” terminology.
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ii. Chime shall enhance its internal review and approval process for
presenting testimonials that may be perceived as representing Chime as a
bank.
iii. Chime shall clarify or annotate in all testimonials it affirmatively markets
that use “banking” terminology that Chime is a financial technology
company, not a bank, and banking services are provided by Chime’s
Banking Partner(s). Further, Chime shall monitor affiliates and agents
who publish other testimonials and provide clarifying information that
Chime is not a bank in response to such testimonials that use “banking”
terminology.
iv. Where appropriate, Chime shall revise website language to state that
customers can open an account “through” Chime, where existing language
states “opening a Chime bank account” or “how to open a bank account
with Chime” or similar language.
v. In Google search results that are paid advertisements, Chime shall place a
statement that banking services are provided by its Banking Partner(s),
which it will identify by name.
vi. Chime shall include in its website Frequently Asked Questions (FAQs) an
answer that clearly explains that the bank accounts are held at its Banking
Partner(s), which it will identify by name.
vii. Chime shall provide a clear and prominent disclaimer during the account
set up process to inform the consumer that Chime is a financial technology
company, not a bank, and banking services are provided by Chime’s
Banking Partner(s).
b. Chime shall enhance its description of Chime’s role as a technology, business
processor, and marketing service provider to its Banking Partner(s) and make
clear that Chime itself is not a bank. The description shall be clear and
conspicuous wherever it is used.
4. Compliance and Reporting. Chime shall establish, implement, enhance and
maintain testing policies, procedures, and standards reasonably designed to, at a minimum,
ensure compliance with the provisions of this Agreement and with Section 46 of the Act.
Furthermore, by June 15, 2021, and again one year after the Effective Date of this Agreement
(as defined in paragraph 22), Chime shall submit to the State an accurate written compliance
progress report, which, at a minimum describes in detail the manner in which Chime has
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complied with this Agreement.
5. Civil Penalty. Chime shall pay a civil penalty of $200,000.00 to the State no
later than 10 days after the Effective Date of this Agreement (as defined in paragraph 22). The
penalty must be made payable in the form of a cashier’s check to the Illinois Department of
Financial and Professional Regulation and delivered via FedEx or UPS to the following
address: IDFPR Division of Banking, Cash Unit, Attn: Kara Oldham/Christina Smith, 320 W.
Washington St., Rm. 338, Springfield, Illinois 62786. Notice of the payment and tracking
number must be concurrently sent to David W. DeCarlo at [email protected].
6. Waiver of Hearing Rights. Chime hereby waives its right to any hearings, and
to any reconsideration, appeal, or other right to review which may be afforded pursuant to 205
ILCS 5/1 et seq, 38 IAC Part 392, 735 ILCS 5/3-101 through 3-113, or any other rights to
hearing, reconsideration, appeal, or other action pertaining to the alleged violations as set forth
in the Recitals (“Violations”). By waiving such rights, Chime effectively consents to the
Agreement becoming final and unappealable and fully enforceable by the State pursuant to the
Act, and Chime agrees to not file any petition for administrative hearing or judicial review of,
or in connection with, this Agreement, except in any proceeding by the State to enforce
compliance with the terms of this Agreement.
7. Full and Final Settlement. Chime hereby acknowledges and agrees that the
Agreement is intended to constitute a full, final, and complete resolution of the Violations, and
that no further proceedings or actions will be brought by the State against Chime based on the
Violations, excepting any proceeding to enforce compliance with the terms of this Agreement
or if such proceeding is based upon discovery of new and further violations of the law or
regulation that do not form the basis for the Agreement and which Chime knowingly concealed
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from the State.
8. Information Willfully Withheld. This Agreement may be revoked if the State
later finds out that Chime knowingly or willfully withheld information used and relied upon in
the Agreement.
9. Assisting Other Agencies. The Parties further acknowledge and agree that
nothing in the Agreement shall limit the State’s ability to assist any other agency (city, county,
state, or federal) with any prosecution, administrative, civil, or criminal action, brought by any
such agency against Chime or any other person based upon any of the activities alleged in this
matter or otherwise.
10. Headings. The headings to the paragraphs of this Agreement are inserted for
convenience only and will not be deemed a part hereof or affect the construction or interpretation
of the provisions hereof.
11. Binding. The Agreement is binding on all heirs, assigns, or successors in interest.
12. Reliance. Each of the Parties represents, warrants, and agrees that in executing
this Agreement, it has relied solely on the statements set forth herein and the advice of their own
counsel. Each of the Parties further represents, warrants, and agrees that in executing this
Agreement, it has placed no reliance on any statement, representation, or promise of any other
party, or any other person or entity not expressly set forth herein, or upon the failure of any party
or any other person or entity to make any statement, representation or disclosure of anything
whatsoever. The Parties have included this clause: (1) to preclude (except as provided in
paragraphs 7 and 8 of this Agreement) any claim that any party was in any way fraudulently
induced to execute this Agreement; and (2) to preclude the introduction of parol evidence to
vary, interpret, supplement, or contradict the terms of this Agreement.
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13. Waiver, Amendments, and Modifications. No waiver, amendment, or
modification of this Agreement will be valid or binding unless it is in writing and signed by each
of the Parties. The waiver of any provision of this Agreement will not be deemed a waiver of
any other provision. No waiver by each of the Parties of any breach of, or of compliance with,
any condition or provision of this Agreement by another party will be considered a waiver of any
other condition or provision or of the same condition or provision at another time.
14. Full Integration. This Agreement is the final written expression and the complete
and exclusive statement of all the agreements, conditions, promises, representations, and
covenant among the Parties with respect to the subject matter hereof, and supersedes all prior or
contemporaneous agreements, negotiations, representations, understandings, and discussions
between and among the Parties, their respective representatives, and any other person or entity,
with respect to the subject matter covered hereby.
15. Governing Law. This Agreement will be governed by and construed in
accordance with Illinois law. Further, for all intents and purposes under Illinois law, the
Agreement is a final and unappealable order issued pursuant to the Act. Each of the parties
hereto consents to the jurisdiction of such court, and hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in such court.
16. Counterparts. This Agreement may be executed in one or more separate
counterparts, each of which when so executed, shall be deemed an original. Such counterparts
shall together constitute a single document.
17. Effect Upon Future Proceedings. If Chime applies for any license, permit or
qualification under DOB’s current or future jurisdiction, or is the subject of any future action by
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such agency to enforce this Agreement, then Chime agrees that this Agreement and its contents
are relevant to such application(s) and admissible in such enforcement proceeding(s) and will not
contest such uses.
18. Voluntary Agreement. Chime enters into the Agreement voluntarily and without
coercion and acknowledges that no promises, threats, or assurances have been made by the State,
or any officer or agent thereof, about the Agreement.
19. Notice. Any notices required under the Agreement shall be provided to each
party at the following addresses:
If to Chime to: Jonice Gray Tucker, Esq.
2001 M Street NW, Suite 500
Washington, DC 20036
(202) 349‐8005
John Kromer, Esq.
2001 M Street NW, Suite 500
Washington, DC 20036
(202) 349-8040
If to the State to: David W. DeCarlo
Deputy General Counsel
Illinois Department of Financial and Professional
Regulation
100 West Randolph, 9th Floor
Chicago, IL 60601
(312) 793-4921
Robert Stearn
Associate General Counsel
Illinois Department of Financial and Professional
Regulation
100 West Randolph, 9th Floor
Chicago, IL 60601
(312) 793-1454
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If to Chime, a courtesy copy shall also be provided to:
Kate Karas
General Counsel
Chime
77 Maiden Lane
San Francisco, CA 94108
kkaras@chime.com
20. Signatures. An electronic signature, or a faxed, photocopied, or scanned copy of
an original signature, shall be deemed the same as an original signature.
21. Public Record. Chime acknowledges that this Agreement shall be a matter of
public record.
22. Effective Date. The Agreement shall become final and effective when signed by
all Parties and delivered by the State to Chime’s counsels of record via e-mail at:
23. Authority to Sign. Each signatory hereto covenants that he/she possesses all
necessary capacity and authority to sign and agree to this Agreement and undertake the
obligations set forth herein.
