The dearth of bank startups in recent years may have something to do with declining business dynamism and weak job growth, ABA President and CEO Frank Keating wrote in an op-ed in The Hill on Friday.
Commenting on the recent conditional approval of deposit insurance for a de novo bank in New Hampshire — only the second de novo charter since 2010 — Keating emphasized the role that banks play in driving economic growth. “Startups are the hallmark of America’s entrepreneurial economic model,” he said. “Banks are critical to financing these ventures.”
There is still demand for new banks, Keating added, but higher capital requirements, bigger compliance burdens and greater legal risks have made it more difficult for investors to justify starting a bank. “I hope regulators see the benefits new banks bring to hometowns—and allow innovative bankers, with new ideas and solid business plans, to serve their communities, promote entrepreneurship and create jobs,” he wrote.