Is Mercury a bank? The label on its Bank Index card says no, and the cards behind it show where a new LLC’s money actually sits

Is Mercury a bank, in the legal sense of the word? I had assumed the answer was a technicality, the kind of thing a lawyer cares about and a founder can skip. Then I opened the Mercury card in Bank Index, a public directory that labels every company it lists by what it legally is, and read the first line under the name. It says E-money or payment institution. The summary below it is blunter: “Mercury is a San Francisco fintech, not a bank.”

That line matters to anyone forming an LLC this month, because the bank account usually comes right after the EIN, and the choice tends to be made from an advert. So I read the cards for the account providers founders ask about most, and for the banks standing behind them. What follows is what the labels say, where the money physically sits, and what changes for a new company when the name on the app is not the name on the charter.

What the Mercury card actually says

The Mercury card scores the company 6.0 overall across 13 needs, every score sourced from its own pages or filings. It reports more than 300,000 customers and 248 billion dollars of transaction volume in 2025. None of that makes it a bank.

The accounts are provided through partner banks, which the card names as Choice Financial Group and Column N.A., with an FDIC sweep that spreads balances to cover up to 5 million dollars. The base plan is free, and domestic wires and ACH cost nothing.

The card also says, in the line that explains the score, “Licence confirmed by a regulator's own list.” I misread that at first as a bank licence, and I was wrong. The field confirms that some licence the company holds appears on a public list the index read. It does not say what kind, and on this card the label above it has already told you which kind it is not. That is an easy thing to get backwards when you are skimming at the end of a long day of filings. The label is the line to trust.

The strength line is where the label shows. Mercury scores 4.5 for financial strength and stability, and the reason is written in plain words: it is not a chartered bank and carries no agency rating. The same line records that in April 2026 the OCC granted preliminary conditional approval for a Mercury Bank, N.A. in Salt Lake City, which would have to open with at least 300 million dollars of paid-in capital and keep a tier 1 leverage ratio of no less than 10 per cent for its first 3 years.

So the honest answer today is no, not yet. A preliminary conditional approval is a step toward a charter, and the card is careful to call it that and nothing more.

Why the label changes what insurance means

The FDIC has a page for exactly this situation, written for people who open accounts through apps. It says that “nonbank companies themselves are never FDIC-insured.” Money sent to a fintech is eligible only once the company has placed it at an insured bank, with records showing who owns what.

Then comes the sentence I had missed the first time I read the page: “FDIC deposit insurance does not protect against the insolvency or bankruptcy of a nonbank company.” Pass-through cover protects you if the partner bank fails. It does not protect you if the app in the middle fails, and in that case the FDIC page says recovery may run through a court and take some time.

For a company with 3 weeks of payroll in the account, the difference between those 2 failures is the whole question. The FDIC's own advice is to identify the specific insured bank a fintech names and to confirm it in BankFind. That is the step the Bank Index cards make short.

Following the money to Column

I went looking for the partner banks next, because the whole promise rests on them. The Column card is a different kind of card, and it says so. The label under the name reads Bank. The summary records Column National Association in Salt Lake City, with the OCC, the Federal Reserve and the FDIC named as regulators, total assets of 1.77 billion dollars at 30 June 2026, 2 offices, and a founding year of 2006.

Its own website line is quoted on the card: “The only nationally chartered bank built to enable developers and builders to create new financial services.” I find that a strange sentence to read straight after the fintech cards, because it is the mirror image of theirs. The fintechs say they are like banks. The bank says it is built for fintechs.

The Column card also tells you, in a line under the score, that its scores are “set by its kind of institution”. Nobody has checked its fees by hand. What it confirms is the thing you came for: a charter, a regulator and a balance sheet with a date on it.

The other partner bank is harder to pin down. I could not match Choice Financial Group to a card with certainty. There is a Choice Bank in Fargo whose card names the FDIC and North Dakota as regulators, and I suspect it is the same institution trading under a shorter name, but the card does not say so and I am not going to pretend it does.

So is BlueVine a bank at all?

The same question comes up for most of the app accounts a new LLC is offered, and the cards answer it the same way. The BlueVine card labels the company Fintech, in Jersey City, with an overall of 5.5.

Its United States line explains the arrangement: nationwide business checking with free standard ACH, wires at up to 15 dollars, and FDIC pass-through cover up to 3 million dollars, “held at Coastal Community Bank rather than under a charter of its own.” Its strength line scores 5.0, noting that the company is privately held with no published accounts and cut about 100 jobs in December 2024.

The Coastal Community Bank card is the bank behind that promise. It is a state member bank in Everett, Washington, with 5.45 billion dollars of assets at 30 June 2026, 14 offices, founded in 1997 and owned 100 per cent by Coastal Financial Corporation. It scores 4.9 overall, with 2 of its scores backed by filings.

If you ask is relay a bank or is novo a bank, the index has a card for each, but both were put together automatically and nobody has read them by hand yet. Relay's own home page answers the question in its footer: “Banking services provided by Thread Bank, Member FDIC.” For Novo the partner bank has to come from the company's own disclosures, and then from BankFind.

The bank that looks like a fintech

The reverse case is worth a look, since it breaks the rule of thumb that an app means a fintech. Grasshopper Bank sells business accounts with digital tools, going by the website line on its card, and the card labels it Bank.

The summary shows Grasshopper Bank, N.A. in New York, supervised by the OCC and the FDIC, with 1.60 billion dollars of assets at 30 June 2026, 1 office and a founding year of 2019. The single office surprised me. One office, a charter, and an app, and on paper it is more of a bank than the far larger names on the fintech cards. The website on the card promises business accounts and lending “to support your business at every stage”, which is marketing, but the charter underneath it is not.

So the app tells you nothing about the licence. The label tells you what matters here. The label does, and it takes about 5 seconds to read once you know where it sits.

A short digression about the word neobank

An aside, because the word turns up in half the comparisons a founder reads. Neobank is an odd word, and it has nothing to do with law. No regulator issues a neobank licence, and none of the cards I opened uses the word as a label. It is a marketing word that covers both Mercury, which has no charter, and Grasshopper, which has one. I would like it retired, or at least printed with the charter status next to it every time, so that a founder comparing 2 apps late at night could see in one glance which of them is a bank and which of them only borrows one. The word sells accounts, and it holds none.

Back to the question. Fintech vs bank is not a quality ranking. Mercury outscores Coastal Community Bank overall, 6.0 against 4.9, because the index scores what a business needs, and Mercury does many of those things well. The label answers a narrower question, which is who is legally holding your money and who pays if something breaks.

How I would read a card before opening the account

Start with the label under the name. Bank, universal bank or credit union means a charter. E-money or payment institution, or fintech, means the money sits somewhere else, and the next step is to find out where.

Read the United States line next. On the fintech cards it names the partner bank and the insurance limit, 5 million dollars through a sweep at Mercury and 3 million at BlueVine, and those limits come from the provider's own pages with a source link.

Open the partner bank's card and read its summary: regulator, assets, date. Then check the certificate in BankFind yourself, which is what the FDIC recommends and what the card's source link points to anyway.

Keep the documents list from our earlier file on LLC bank account requirements next to you. The papers stay the same either way. A fintech and a bank ask for much the same papers, and neither will open the account until the EIN letter and the beneficial ownership details are in order.

If the label says credit union, the logic is the same. What changes is the insurer behind it. Share accounts at a federally insured credit union are covered by the NCUA rather than the FDIC, and our file on credit union accounts for an LLC walks through the membership test that comes first.

What I still cannot tell you

I cannot tell you from the cards how a fintech's records would hold up if the fintech failed, which is the scenario the FDIC page warns about. The cards record partner banks and insurance limits as the providers state them. They cannot audit the ledger that maps each dollar to each customer, and I have not found any public document that does. That is the part I would want to see.

I also have no idea what happens to the Mercury card on the day the charter is granted. I would guess the label changes and the strength score moves up, since the reason for the 4.5 is the missing charter, but that is a guess about a rule I can read and a decision I cannot.

I keep thinking about the Column line. A bank that exists to sit behind apps, 2 offices in Salt Lake City, holding the money of companies whose founders may not have heard its name. It may be the most important bank in a lot of new LLCs’ lives, and it is the one nobody chose.