The FDIC today announced a new, two-phase process for deposit insurance applications meant to speed up agency reviews and encourage de novo bank formation.
According to an FDIC statement, de novo applicants that meet certain conditions will get contingent authorization within 120 days of the agency receiving the application. Applicants will then be eligible for full approval within the subsequent 12 months, as long as they provide additional information and complete key organizational steps.
The two-step approval process is meant to provide groups forming banks with more clarity before they spend more time raising capital, hiring staff and establishing the infrastructure needed to launch a new institution, the FDIC said. The agency expects most applicants will be able to file applications concurrently with the FDIC and chartering authority.
“Improving the de novo process and encouraging more new bank formation has been a key priority for the FDIC,” Chairman Travis Hill said. “Today’s action is one of several steps the FDIC has been working on in furtherance of this goal. A healthy pipeline of new entrants is critical to the long-term vitality of the banking sector, particularly for community banks.”
In a statement on X, the American Bankers Association said it appreciates FDIC’s efforts to remove barriers to new bank formation by facilitating a timely, transparent and tailored approval process.
“De novo banks promote competition and greater economic activity in communities across the country,” ABA said.
