Over the last 18 months, there has been a great deal of activity from a wide range of market participants seeking new charters for banking entities, including de novo banks and trust companies, acquisitions of banking vehicles, charter conversions and similar proposals. Activity is substantial for both federally and state-chartered entities.
We want to highlight for clients two recent developments relating to de novo charters:
1. Serious Scrutiny
The Office of the Comptroller of the Currency (the “OCC”), which is the chartering authority and regulator of all national banks and national trust banks, has seen a significant influx of applications and there has been an unprecedented level of approvals. The national charter path is currently seen by many as offering the greatest flexibility and predictability.
The OCC has, however, publicly rejected two de novo applications in recent days. These applications both presented issues that the OCC concluded were not consistent with approval of the charters sought, and in particular, the OCC had concerns about the proposed business, management, finances or operational plans presented in these applications.
This development confirms that the underlying business plans, financial projections, capital resources, management and compliance programs need to be carefully developed and thoughtfully presented in the application. The consequences of an inadequate proposal may be a rejection, not merely a drawn-out regulatory process. Moreover, the OCC has said it plans to publish all denial decisions, which typically come in the form of a public letter explaining reasons for the OCC’s action.
2. FDIC Process
On August 10, 2026, the Federal Deposit Insurance Corporation (the “FDIC”) announced a revised, two-phase process for reviewing applications for federal deposit insurance. A proposed insured national bank must obtain charter approval from the OCC and deposit insurance approval from the FDIC. During the first phase, the FDIC intends to provide applicants that satisfy the relevant requirements with a contingent authorization within 120 days after receiving the deposit insurance application. During the second phase, which may extend for up to 12 additional months, the organizers will submit additional information and complete the required organizational steps, after which the FDIC may issue its approval and deposit insurance order. When an applicant notifies the FDIC that the institution is ready to open, the FDIC will confirm whether all pre-opening conditions have been satisfied.
The FDIC expects that, subject to certain exceptions, applicants generally will be able to file concurrently with the FDIC and the relevant chartering authority. The FDIC also intends to coordinate with the chartering authority throughout the process. The new process should work better in parallel with the OCC’s existing process in which the successful application receives a preliminary approval, subject to conditions to be fulfilled afterwards. The revised procedures will apply to deposit insurance applications received after August 15, 2026.