{"id":1124,"date":"2020-12-15T09:30:19","date_gmt":"2020-12-15T16:30:19","guid":{"rendered":"https:\/\/avalaunchsites.com\/bma\/?p=1124"},"modified":"2020-12-16T14:31:35","modified_gmt":"2020-12-16T21:31:35","slug":"how-to-start-a-de-novo-bank-in-2021","status":"publish","type":"post","link":"https:\/\/avalaunchsites.com\/bma\/2020\/12\/how-to-start-a-de-novo-bank-in-2021\/","title":{"rendered":"How to Start a De Novo Bank in 2021"},"content":{"rendered":"

The year 2021 will be a welcome, clean slate after the difficult year we just experienced. Now is the time to act on fresh ideas and plans. It\u2019s a lot of hard work to start a new bank, but in this new season of opportunity, it\u2019s worth the effort. Modern technology can help any ambitious individual streamline the process and find success in their De Novo bank.\u00a0<\/span><\/p>\n

Below, you\u2019ll learn about the FDIC\u2019s requirements for fledgling banks, <\/span>how to go about starting a De Novo bank<\/span> in 2021<\/span>, and who to partner with along the way.<\/span><\/p>\n

Why Start a Bank?<\/strong><\/h2>\n

Whether you\u2019re motivated by an innate entrepreneurial spirit or love of community, owning a bank is a good idea. Bank investments have shown strong returns and low levels of volatility compared to other sectors. But those seeking to start a bank have always faced the question of whether to build or buy. For a long time, buying seemed to be the more favorable option because of all the regulatory hurdles involved with <\/span>starting a De Novo bank<\/span><\/a>. In recent years, however, the U.S.<\/span> government has sought to make De Novo banking more appealing.<\/span><\/p>\n

In<\/span> December 2018<\/span><\/a>, the Federal Deposit Insurance Corporation (FDIC) announced new initiatives to streamline the deposit insurance application process. With more transparent processes, the FDIC expects it to be easier for new banks to open across the country \u2014 and that\u2019s good news for anyone reading this article.<\/span><\/p>\n

\"\"Requirements for Starting a De Novo Bank in 2021<\/b><\/strong><\/h2>\n

When you\u2019re looking into starting a bank, you should plan to spend quite a bit of time preparing and filing documents. The amount of time it actually takes from ideation to opening your doors for the first time will take between six months to a year. But this amount of time greatly depends on how much capital you have raised, your management team, and how many people you have on your team to assist with De Novo banking applications.<\/span><\/p>\n

Before filling out your application, make sure you know what\u2019s required of your bank. You\u2019ll need significant capital, approval from regulators, and immense patience, as the process could take over a year. The FDIC will want plenty of information about you as the organizer, your business plan, several years\u2019 worth of financial projections, and more before approving your application. <\/span>It is often recommended to engage with<\/span> qualified consultants<\/span><\/a> to ensure all application information is complete and correct.<\/span><\/p>\n

Charter application<\/span><\/i><\/p>\n

Those looking to start a bank must file <\/span>applications for chartering<\/span><\/a> and <\/span>insurance<\/span><\/a> with the relevant regulatory bodies. These forms are available on the FDIC website.\u00a0<\/span><\/p>\n

The chartering decision is a critical decision one that will be based on the organizer\u2019s vision for the bank. When filling out your bank charter application, you must indicate which of the following best describes your institution. Do you want your bank to be a state, national, or thrift bank?\u00a0<\/span><\/p>\n