WASHINGTON — The Federal Deposit Insurance Corp. is revamping its application process for new banks in an effort to speed decisions on federal deposit insurance and encourage the formation of new financial institutions.
The FDIC announced it is adopting a two-phase process for reviewing deposit insurance applications from new, or “de novo,” banks.
The agency said the changes are intended to “encourage new bank formation, accelerate the speed of the review process, and improve the efficiency of the application process.”
‘Contingent Authorization’
Under the new procedure, organizers could receive a “contingent authorization” from the FDIC within 120 days after the agency receives an application. Final approval could follow within the subsequent 12 months after organizers provide additional information and complete required organizational steps.
The FDIC said the approach is designed to give organizers greater certainty within a few months and before they commit significant resources to raising capital, hiring employees and developing technology and other infrastructure.
“When deposit insurance applicants notify the FDIC that the institution is ready to open, the FDIC will affirm that all pre-opening conditions have been met,” the agency said.
What FDIC is Expecting
The FDIC said it expects applicants in most cases will be able to submit applications simultaneously to the agency and the appropriate federal or state chartering authority.
The agency also said it will work with chartering authorities throughout the process to reduce duplication and expedite decisions.
“In addition, the FDIC will coordinate with the chartering authority throughout the application process to promote efficiency, avoid duplication, and ensure timely action,” the agency said.
