ABA Supports Bill to Study Challenges Faced by Prospective De Novos

In a letter sent ahead of a House Committee on Financial Services markup tomorrow, the American Bankers Association expressed support for H.R. 4590, the Promoting New and Diverse Depository Institutions Act, introduced by Rep. Jake Auchincloss (D-Mass.). The bill would require regulators to conduct a study about the challenges faced by proposed depository institutions seeking de novo bank charters.

The association wrote that the legislation will provide “long overdue analysis and strategic plan needed to help proposed depository institutions (including proposed minority depository institutions) successfully apply for de novo depository institution charters in a manner that promotes increased availability of banking and financial services and other consumer-targeted objectives.” Currently there are 3,855 fewer banks in the U.S. than in 2005, a 43.6% decline, ABA noted, and of the banks active today, only 27 were established after 2010.

“ABA has long supported legislative and regulatory efforts that facilitate the formation of new banks in our country. Legislation like this and measures introduced by Financial Services Committee member Rep. Andy Barr (R-Ky.) will help unlock economic opportunity, growth, and investment in communities most in need,” the letter said.