Chime (company)

Chime Financial, Inc. is a San Francisco–based financial technology company that partners with regional banks to provide certain fee-free mobile banking services. The company offers early access to paychecks, negative account balances without overdraft fees, high-yield savings accounts, peer-to-peer payments, and an interest-free secured credit card. Chime earns the majority of its revenue from the collection of interchange fees on debit card transactions.

Chime is not a bank and Chime customers do not have a customer relationship with its banks. Chime can and does cancel user accounts without notice; moreover, it is not required to provide a reason for the cancellation to the customer or even have a reason. Customers cannot appeal to banking regulators to retrieve their deposits, which may not be returned in a timely fashion.

History
Chime was founded by Chris Britt (CEO) and Ryan King (CTO) in 2012 in San Francisco, California as an alternative to traditional banking with a mission of creating financial peace of mind. The company launched on April 15, 2014, on the Dr. Phil Show. As of 2020, Chime has raised $1.5 billion in private funding and in 2022 was named one of Fortune's Best Places to Work.

Chime provides mobile banking services via its bank partners without monthly or overdraft fees, and it does not require an opening deposit or minimum balance to open a free checking account.

In 2018, Chime acquired Pinch, a startup focused on helping millennials and young adults build their credit scores by reporting on-time rent payments to credit bureaus. Pinch's co-founders joined Chime's team as a part of the acquisition.

On October 16, 2019, Chime experienced a service outage leaving users without access to their deposits. The issue was resolved the next day.

In January 2020, Chime announced a partnership with the Dallas Mavericks as their jersey sponsor as a part of a multi-year deal. Chime had 8 million account holders in February 2020.

In April 2020, in response to the financial strain of the COVID-19 pandemic, Chime announced a pilot program to provide users who e-filed tax returns with the IRS a $1,200 advance on the Economic Stimulus Payment via SpotMe, Chime's fee-free overdraft product. Chime later announced the successful processing of over $375 million in stimulus payments one week ahead of the scheduled government disbursement date. In September 2021, Chime leased 192,000 square feet of office space across six floors in a San Francisco building owned by Hines. According to a report by Forbes, Chime had planned to hold an initial public offering (IPO) in March 2022. The company delayed its IPO, however, in February 2022. Chime laid off 160 positions, equalling 12% of its workforce, in November 2022. , the company, which operates under a hybrid work model, reported having 1,300 employees and 7 million customers.

Funding
Some of Chime’s notable early investors include seed investors Satya Patel of Homebrew and Kirsten Green of Forerunner; Series A investors Lauren Kolodny of Acrew Capital (formerly Aspect Ventures) and Crosslink Capital. Later rounds included Menlo Ventures, DST, General Atlantic and Coatue.

In August 2021, Chime Financial raised $750 million in a series G funding round, led by investor Sequoia Capital Global Equities. This values the company at about $25 billion.

Marketing as a bank
Chime, which is not a bank, in 2021 came to agreements with two state financial regulators, the California Department of Financial Protection and Innovation and the Illinois Department of Financial and Professional Regulation, to stop representing itself as a bank. The company agreed to stop using the URL "chimebank.com", change its use of the word "bank" in marketing, and add disclaimers to its marketing and product text. It paid $200,000 in the settlement with Illinois.

Account closures, difficulty recovering deposits
In July 2021, ProPublica published an article detailing Chime's record of closing customer accounts without notice or explanation, sometimes refusing to return customer deposits. Chime has attributed the closures to the accidental byproduct of fraud prevention.

In 2022 Chime's practice of closing customer accounts without notice or explanation was again reported. The company has no obligation to provide a reason, or even have a reason, to close an account. As of the November, 2022 report the Consumer Financial Protection Bureau had received 3,500 complaints about Chime since the beginning of 2020. Customers with closed accounts sometimes had difficulty retrieving their deposits in a timely fashion. Since Chime customers are not customers of any bank, their recourse is often limited.

The U.S. Consumer Financial Protection Bureau in 2024 assessed a $3.25 million penalty plus at least $1.3 million in redress to customers for not returning deposits from closed accounts in a timely manner. Until 2021 Chime's customer service agreement said deposits would be issued by check, mailed within 14 days. Thousands of customers waited 90 days or longer. The settlement gives at least $150 in redress to any customer who had a $10 balance after 14 days from account closure. The $3.25 million penalty was paid to the CFBP victims relief fund. The company attributed the problem to a "configuration error" in 2020 and 2021.

Handling customer complaints
In 2024 Chime entered into a consent order with the California Department of Financial Protection and Innovation (DFPI) and paid a $2.5 million penalty to resolve an investigation into the company's customer service. The DFPI found that customer compliants were not being handled fairly, accurately, and in a timely manner in compliance with the California Consumer Financial Protection law. The company agreed to provide 24-hour 7-days per week customer service support with sufficient training and staffing to be in compliance. Chime agreed to report on its compliance to DFPI for two years.

Products
Chime offers various fee-free banking products, including checking accounts with no minimum balance, an automated savings feature, and early wage access.

In September 2019, Chime launched SpotMe, a fee-free overdraft service where customers can overdraw their accounts up to $100 without incurring an overdraft fee; once the overdraft limit is reached, purchases will be declined but no traditional negative balance fees charged.

Chime launched Credit Builder with Stride Bank, N.A in June 2020, which is a credit card designed to help consumers build their credit history. Chime was the most downloaded digital banking app in the U.S. during the first half of 2021, according to data collected by Apptopia.

Customer service
, Chime has a 'A' rating from the Better Business Bureau (BBB), with 8,000 customer complaints during the previous 3 years.

Chime has no physical branches and does not charge monthly or overdraft fees, nor does it require an opening deposit or minimum balance to open a free checking account. Bank accounts that are provided via Chime's partners are FDIC insured up to the standard maximum deposit insurance amount of $250,000. So far the accounts are only available for individuals of personal accounts; all money received must be in the name of the individual account owner.

Chime can close user accounts with no notice, it is not required to provide a reason for the cancellation to the customer. Chime's partner banks have a duty under “know your customer” rules to guard against money-laundering or other suspicious activity, including closing down suspicious accounts.