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Analysts expected oil to surge above $200 but China has quietly kept prices half of that—and can’t for much longer

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Marc Lore’s robots make 500 burrito bowls an hour. A human can make 45
Robinhood

Robinhood Backtracks on Checking and Savings Accounts After Regulatory Concerns

Emma Hinchliffe
By
Emma Hinchliffe
Emma Hinchliffe
Most Powerful Women Editor
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Emma Hinchliffe
By
Emma Hinchliffe
Emma Hinchliffe
Most Powerful Women Editor
Down Arrow Button Icon
December 16, 2018, 10:59 AM ET

Robinhood’s no-fee, 3% interest checking and savings accounts might have been too good to be true.

The financial technology startup known for its stock trading app and cryptocurrency exchange introduced the cash management option that seemed to casual consumers to replace traditional bank accounts last week. But that quickly prompted questions about whether the accounts would protect consumers’ money.

“We’re excited and humbled by the response to yesterday’s announcement of Robinhood’s cash management program launching in 2019,” Robinhood’s co-founders wrote in a blog post Friday. “However, we realize the announcement may have caused some confusion.”

The issue at hand was the difference between a brokerage account and a bank account, and Securities Investor Protection Corp insurance and Federal Deposit Insurance Corporation Insurance. Bank accounts are protected by the FDIC, while brokerage accounts—meant for investors to hold cash until it can be invested in securities—are covered by the SIPC.

Robinhood’s accounts were brokerage accounts, and any money consumers put in those accounts that they didn’t intend to invest in securities might not have been covered by the SIPC.

Stephen Harbeck, head of the SIPC, told CNBC that the startup had not contacted his office or the Securities and Exchange Commission before announcing the launch of their program.

Robinhood said on Friday that it would “re-vamp” the program.

“As a licensed broker-dealer, we’re highly regulated and take clear communication very seriously,” the co-founders wrote. “We plan to work closely with regulators as we prepare to launch our cash management program, and we’re revamping our marketing materials, including the name.”

About the Author
Emma Hinchliffe
By Emma HinchliffeMost Powerful Women Editor
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Emma Hinchliffe is Fortune’s Most Powerful Women editor, overseeing editorial for the longstanding franchise. As a senior writer at Fortune, Emma has covered women in business and gender-lens news across business, politics, and culture. She is the lead author of the Most Powerful Women Daily newsletter (formerly the Broadsheet), Fortune’s daily missive for and about the women leading the business world.

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