The American Bankers Association today offered several recommendations on how the FDIC can modify the deposit insurance application process for community banks. The FDIC issued an RFI in December seeking feedback on the process as part of its ongoing initiative to foster de novo bank formation.
Noting the significant lack of de novo activity in recent years, ABA suggested several steps the FDIC could take to encourage new applications, including increasing transparency around the de novo timeline and approval process; establishing more efficient and direct communication channels; and shifting the majority of de novo decision-making to the FDIC’s regional offices.
ABA also called on the FDIC to simplify the requirements for de novos seeking to deviate from their established business plan, and for the FDIC to more clearly communicate its expectations regarding initial capital requirements. Finally, it recommended that the FDIC revise its statement of policy on applications for deposit insurance to allow more flexibility in setting reasonable compensation arrangements for bank organizers.