In a February 17, 2017 comment letter to the Federal Deposit Insurance Corporation (FDIC) regarding its proposed new Application Handbook for newly chartered banks, CBAI expressed support for Chairman Martin Gruenberg’s recent statement that, “Newly chartered (de novo) community banks are vitally important to maintaining a strong, growing, evolving and vibrant banking profession.”
CBAI stated that the proposed FDIC Application Handbook contains a useful roadmap for those interested in deposit insurance for a proposed new bank charter. CBAI noted, however, that the absence of a useful roadmap was not the barrier to obtaining deposit insurance and the dearth of de novo banks during the past seven years. The lack of new charters was apparently the result of a decision by the FDIC, despite a formal position to the contrary, to require new bank charter applicants to prove they were virtually failure-proof rather than just having a reasonable likelihood of succeeding.
An obvious example was a requirement that extended the de novo period to seven years for examinations, capital maintenance, and other requirements. Last year the FDIC reduced the requirement to three years which, when combined with the Chairman’s recent comments and additional resources (including the Application Handbook), hopefully signals a sincere change in the position of the FDIC towards approving applications for deposit insurance for de novo charters.
CBAI looks forward to a resumption of many new banks being chartered each year to help maintain the community banking profession. Read CBAI Comment Letter to the FDIC.