Senior ICBA staff and ICBA’s De Novo Working Group met with FDIC Acting Chairman Travis Hill to discuss regulatory challenges that de novo banks face.
Meeting Details: The working group, which comprises de novo bankers from around the country, advocated lower capital requirements, streamlined applications, and tailored supervision that will increase de novo bank formation and lower the regulatory burden on existing de novo banks.
More: The working group told Hill about:
Pre-opening challenges, such as high capital requirements, challenges raising capital, the length of the application, coordination between regulators, and onboarding third-party providers.
Challenges in the de novo period, such as delays in having routing numbers published and recognized by third-parties, difficulties in modifying their business plan, and supervision.
Existing de novo concerns, such as reaching profitability, attracting and retaining talent, and making a positive impact on their communities through small-business lending.
Congressional Response: ICBA in April applauded the House Financial Services Committee for advancing the Promoting New Bank Formation Act (H.R. 478), which directs regulators to phase in capital standards for newly formed banks, remove limitations on agricultural lending at de novo institutions, and address excessive regulatory burdens hindering the formation of new community banks.
ICBA Advocacy:
ICBA community bankers Keith Costello of Locality Bank in Fort Lauderdale, Fla., and Mary Usategui of BankMiami in South Miami, Fla., in May testified at a House subcommittee hearing in support of H.R. 478.
At the first House Financial Services Committee hearing of the new Congress, ICBA President and CEO Rebeca Romero Rainey called on lawmakers to promote the formation of de novo community banks, which is a key tenet of ICBA’s “Repair, Reform, and Thrive” plan.