Further changes to the deposit insurance application process could go a long way to encourage the creation of new community banks, ICBA told the FDIC. In a comment letter on the agency’s de novo application process, ICBA suggested:
- phasing in capital requirements over a three-year period, particularly in areas where access to capital is limited,
- shortening the application process to 120 days and advising applicants as soon as possible during the pre-filing period of all regulatory obstacles,
- streamlining the business plan section of the application,
- allowing more regulatory flexibility for deviations in the business plan,
- creating a “sandbox” approach for de novo bank applicants in rural areas so that regulatory requirements for those applicants would be phased in, and
- fundamentally shifting the FDIC’s overly conservative attitude towards the application process.
ICBA clarified that these recommendations apply only to de novo community bank applicants, not industrial loan corporation applicants. ICBA reiterated its position that the ILC loophole should be closed.
Read ICBA Comment Letter