FDIC Launches Initiative to Encourage De Novo Formation

The FDIC formally launched its highly anticipated initiative to foster de novo bank formation. In a request for information issued today, the FDIC is seeking feedback on how it could modify the application process for traditional community banks; whether and how it should support the evolution of emerging technologies and fintech firms as part of the application process; and any factors that discourage potential applicants.

The FDIC also issued a financial institution letter outlining a new process by which new applicants for deposit insurance may submit a draft application and receive feedback from FDIC staff prior to filing the formal application. In the FIL, the FDIC said it expects to provide updates to organizers within 30 days of receiving a draft proposal and communicate all feedback within 60 days.

Additionally, the FDIC issued an update to its de novo handbook, as well as a final version of its deposit insurance applications procedures manual. While the handbook and manual do not establish new policy or guidance, or modify existing policy or guidance, they are intended to provide greater transparency and clarity about the deposit insurance application and review process.

Finally, the FDIC reissued its processing timeframe guidelines for applications, notices and others filings submitted on behalf of institutions and other parties, as part of its ongoing effort to foster greater transparency within the agency.