Good lobbying. They just do everything a bank does without any of the obligations. Honestly I’m surprised some real banks have not tried to become like PayPal to allow more sleaziness.

They are licensed as a money transmitter like Western Union. It is a lessor form of regulation. So while they look "bank like" in some things they are not legally a bank.

They can ask to be considered a bank. That would require them to implement all those regulations. I'm sure they don't like the idea.