FFIEC affirms commitment to de novo formations

The Federal Financial Institutions Examination Council released a statement affirming its members’ commitment to de novo bank formation and to exploring ways to lower regulatory barriers to establishing new financial institutions.

The FFIEC statement reads:

“The number of depository institutions in the U.S. has fallen steadily over the past three decades while the overall banking system has grown significantly in asset size. Since the financial crisis of 2008, the number of de novo formations has stagnated, which contributes to the declining number of depository institutions. Further, based on industry feedback, the FFIEC member entities understand that unnecessary delays, costs, or unpredictability in application processes may discourage potential organizers from seeking to form new depository institutions. 

The formation of new depository institutions is crucial for maintaining a healthy financial system. The entrance of de novos helps maintain competition in the banking sector, fosters innovation in products and services, and broadens consumer access to credit and other banking services.”