FDIC looks to streamline deposit insurance application process for new banks

by Talk Business & Politics staff ([email protected]) 566 views 

The Federal Deposit Insurance Corp. (FDIC) recently moved forward with multiple initiatives to improve the nation’s deposit insurance process for organizers of new banks. FDIC officials said regulators are looking to promote a more transparent, streamlined and accountable process for all applications submitted to the agency.

“A pipeline of new banks is critical to the long-term health of the industry and communities across the country. The application process should not be overly burdensome and should not deter prospective banks from applying. The FDIC wants to see more de novo banks, and we are hard at work to make this a reality,” said FDIC Chairman Jelena McWilliams.

As part of the initiatives, the FDIC is seeking comment from interested parties on all aspects of the deposit insurance application process. Through a Request for Information (RFI), the FDIC is soliciting feedback on several topics, including ways in which the FDIC could or should support the continuing evolution of emerging technology and Fintech companies and aspects of the application process that may discourage potential application.

Federal banking regulators also are looking for suggestions on possible changes to the application process for traditional community bank proposals and ways for improving the effectiveness, efficiency, or transparency of the application process. Comments on the RFI will be due 60 days from publication in the Federal Register.

The FDIC has also established a voluntary process that gives organizers of new institutions the option of requesting feedback on a draft deposit insurance proposal before filing a formal application. The new process is intended to provide an early opportunity for both the FDIC and organizers to identify potential challenges with respect to the statutory criteria, areas that may require further detail or support, and potential issues or concerns.

At the end of the third quarter, the FDIC insured deposits for 5,479 of the nation’s banks and savings associations. For more information on the application process, click here.