Partner, Corporate & Commercial Law
Most US "digital banks" are neobanks running on someone else's license. Grasshopper is the exception: its own national charter granted by the OCC in 2019, startup and SMB banking, SBA lending and a BaaS arm. In December 2025 the bank agreed to be acquired by online lender Enova for about $369M — a deal every client of the bank should be watching.
Who they are and the license
Grasshopper Bank, N.A. is a New York digital bank on a de novo OCC national charter received in 2019 — a rarity: most fintech banks buy existing licenses rather than build from scratch. FDIC-insured, held by Grasshopper Bancorp (Delaware). Founder Judith Erwin, a veteran of venture banking, built it for startups; since 2021 the CEO has been Mike Butler, who previously built Radius Bank (sold to LendingClub), and the bank pivoted to a broader market: SMBs, embedded finance and, later, consumers.
FY2025 scale: total assets $1.59B (+83% YoY), loans $1.11B (+73%), deposits $2.94B (+125%). The deposit base exceeds the balance sheet — the excess is placed through partner-bank sweep networks; for a client that is an accounting detail worth understanding, not cosmetics. In August 2025 the bank raised $46.6M of fresh capital.
Products and programs
- Direct banking. High-yield business checking, accounts for startups and VC funds, digital treasury management, commercial real estate and SBA 7(a) lending — 2025 was the bank's breakout year for SBA volumes.
- BaaS and API banking. Grasshopper sponsors fintech programs and embedded-finance products — a second channel of deposits and fees.
- Consumer. On April 1, 2025 the merger with Auto Club Trust, FSB — Auto Club Group's bank (~$495M in assets) — closed: Grasshopper became the exclusive bank powering deposit and lending products for 13M+ AAA members across 14 states.
Who gets in
The core is US-incorporated business: Delaware C-corp startups, SMBs, investment funds. The requirements are standard: EIN, formation documents, beneficial-owner details, KYB. A non-resident founder of a US company is a selective case: the bank wants real US nexus — an address, a team, actual flows; a purely non-resident structure with no presence is not its profile, and such cases usually end up at Mercury. Retail is limited to the inherited AAA-member channel.
Onboarding
The application takes minutes online; simple structures get decisions in days. Multi-layer holdings and foreign UBOs go to manual review and take weeks — or get declined. End clients of BaaS programs are onboarded on the partners' side.
Risks and the regulatory backdrop
The main storyline is the Enova International deal (December 11, 2025): the online lender behind NetCredit and CashNetUSA is buying Grasshopper Bancorp for about $369M in cash and stock. Closing is expected in H2 2026, subject to OCC and Federal Reserve approvals; as of Q1 2026 both sides confirmed the timeline. The deal is contested: consumer groups led by the NCLC object to handing a national charter to a high-cost lender — the classic rent-a-charter debate. For clients it is a continuity question: deposit terms, BaaS appetite and the startup focus under the new owner.
Second: deposits above the balance sheet mean sweep placement at other banks — check where the money actually sits and how pass-through insurance is documented. Third, the ordinary integration risk of two mergers back to back: ACT in 2025, Enova in 2026.
Q/A
Can a non-resident open an account at Grasshopper?
The bank needs a US-incorporated business with real US nexus. A non-resident founder with an operating US company — possibly, selectively; a structure with no US presence — almost certainly not.
What will the Enova acquisition change?
Grasshopper becomes Enova's bank subsidiary (a new bank holding company is being formed); the charter and FDIC insurance remain. Closing is expected in H2 2026; until then products run as before — after that, watch the new owner's policy.
How does Grasshopper differ from Mercury?
Grasshopper is a bank: money sits on its balance sheet with direct FDIC insurance. Mercury is a neobank on top of partner banks with pass-through insurance. Mercury, though, is noticeably friendlier to non-residents.
Is Grasshopper a sponsor bank?
Partly: BaaS is one of its channels. Unlike pure sponsor banks such as Cross River, it has a large direct business: startups, SBA loans, AAA members.
📎 Need the full picture? Request our banks comparison file (thresholds, compliance, timelines by jurisdiction) via the form below — we email it the same day.
Related topics
- US Sponsor Banks: Partner Banks for Fintech and BaaS
- Cross River Bank: The Sponsor Bank Behind US Fintech
- Column N.A.: The Developer Bank for BaaS Programs
- Lead Bank: The Kansas City Sponsor Bank for Fintech Programs
Prepared as an expert overview; not individual legal advice.