RLR Management Consulting

De Novo’s are Back!

By Ruth Razook,Founder & CEO
RLR Management Consulting, Inc.

Maybe not as fast as we thought, but De Novo banking is back! There were 5 new bank charters approved last year, 3 banks opened and 2 received approval to open. According to the FDIC, there have been 8 applications filed as of April 30, 2018. Interestingly, we saw one De Novo, Blue Gate Bank,which opened in 2017and recently sold. There have been others that have stalled or withdrawn their application.

According to Comptroller Joseph Otting, the OCC has not made a decision if they will grant bank charters to Fintech companies. He has stated that a decision will be made in July. He also said for the Fintech companies, “They began to learn about national banking versus state banking and operating across state lines and then they come talk to us, and we explained the issue … of capital, liquidity and serving your community and similar CRA kind of thing,” Otting said. “A lot of them, I kiddingly say, leave skid marks leaving the building. They had no idea what it was like to be a national bank or often even a state bank.” Check out the recent article in American Banker by Jackie Stewart “Why these three de novos went nowhere” . https://www.americanbanker.com/news/why-these-three-de-novos-went-nowhere