The American Bankers Association today expressed its support for a House bill to boost the formation of de novo banks. The “Promoting Access to Capital in Underbanked Communities Act” (H.R. 758), introduced by Rep. Andy Barr (R-Ky.) would establish a three-year phase-in period for new banks to comply with federal capital standards, among other provisions designed to promote and sustain de novo banking.
In a letter to the chairman and ranking member of the House Financial Services Committee, ABA noted there are 4,746 banks in the U.S. today, down from 8,833 in 2005. Only 55 of today’s banks were established after 2010.
“By facilitating the formation of new banks in urban and rural areas, this legislation expands banking access for both individuals and small- and medium-sized businesses,” ABA said. “The bill would unlock economic opportunity, growth, and investment in communities most in need, while also promoting competition. The temporary regulatory adjustments provided in this bill are a reasonable step to encourage formation of de novo banks that will be well equipped to meet the banking and financial needs of their local customers and communities. The bill should readily receive bipartisan interest and support.”