Because if you use depositor money for loans, as all banks do, you fall under the jurisdiction of the Federal Deposit Insurance Corp. and the Community Reinvestment Act, which bans discriminatory credit practices against low-income areas, known as redlining. In exchange, banks use leverage, but that's courting trouble.

This is from Andy Kessler, "The Uberization of Banking," Wall Street Journal, April 29, 2016 (the Saturday/Sunday issue of the WSJ for those who get the print version). The whole thing is worth reading, as is John Cochrane's "Equity-Financed Banking," which called my attention to the WSJ piece.

Cochrane summarizes succinctly:

Yes, bank "safety" regulations demand that banks purposely lend to people that one can pretty clearly see will not pay it back, and demand that they do not lend money to people that one can pretty clearly see will pay it back.

Back to Kessler:

SoFi doesn't take deposits, so it's FDIC-free.