OCC Supports FDIC Reform to Bring Back New Bank Charting and Make U.S. Banking More Competitive

The Office of the Comptroller of the Currency (OCC) has publicly supported the Federal Deposit Insurance Corporation’s changes to the deposit insurance application process. It called the changes a step toward bringing back new bank charting and making the U.S. Banking system more competitive.

The FDIC’s new way of reviewing applications matches the OCC’s goal of helping banks get started. Regulators now see banks as a way to bring in new ideas, more choices for customers and a stronger financial system over time.

Comptroller of the Currency Jonathan V. Gould said new bank charting is a sign of a banking system. He added that a clearer and more open process can help responsible new companies enter the banking world.

A move to fix years of growth

The news comes after more than 10 years of fewer new banks forming in the United States.

According to the OCC new bank charting dropped a lot over the 15 years. Because of that the banking industry became less active and less competitive. Between 2011 and 2014 the agency got than four charting applications each year on average. In some years it got none all.

Regulators now seem focused on changing that trend. A predictable charting process could make things less confusing for people applying. It could also help new financial companies get started.

A more clear charting process

One of the biggest changes is the rise in new charting activity.

In the 18 months the OCC got 40 new charting applications, including for national trust banks.

In cases the agency made charting decisions within 120 days after getting a complete application.

Because of that a service national bank got final approval from the OCC and started working again for the first time in five years.

This achievement shows that regulators are trying to speed up bank creation while still keeping standards.

Digital assets and new financial ideas

A part of the OCC’s announcement was about digital assets and new financial technologies.

Gould said companies that do work should have a way to become national banks. That includes companies working with assets and other new financial technologies.

This message suggests that regulators might be more open to charting applications from companies in fintech, blockchain, tokenization, payments and digital finance.

For the fintech world this could mean chances for companies looking for a federal banking system instead of just working with partners.

Why new bank charting is important

Creating banks has helped bring more credit to people in the past. It has also made the banking system more competitive and supported special financial services.

New banks often bring tools, ways of working and products that make customers happy and challenge older banks.

Fewer new banks can make the banking industry less competitive. It can also stop ideas from coming in.

By helping new companies come in regulators hope to create a varied banking world that can change with new technology and money changes.

The FDIC link

The OCC’s support came shortly after the FDIC made changes to improve the process for getting deposit insurance.

Getting deposit insurance is one of the most important steps to start a new bank.

A clearer way to review applications could help qualified companies move through the rules easily. It could also make the expectations of the supervisors clearer.

Better teamwork between charting and deposit insurance is important to help more new banks get started.

A different way of talking

the biggest part of the news is the change in what regulators are saying.

For a time some people in the industry said getting a federal bank charter had become harder.

Regulators now seem to be making a friendly approach to new ideas and new bank creation.

More openness, quicker decisions and being open to tech-based business models show an effort to make the federal banking system more up to date.

The main point

The OCC’s support for the FDIC’s changes to deposit insurance is a step toward bringing back new bank charting in the United States.

With 40 applications in the 18 months quicker approval times and being ready to look at fintech and digital asset businesses regulators are trying to build a more competitive and new banking system.

If the current speed continues the return of bank charting could be one of the most important changes in U.S. Banking rules. It could create chances, for banks, fintech companies and financial tech people.

OCC Commends FDIC Reform, Advances Priority to Reinvigorate De Novo Chartering

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