FDIC Publishes Handbook for Organizers of New Depository Institutions
Commentary by Steven Lofchie
The FDIC published a handbook for new depository institutions. The handbook was designed to help potential organizers become familiar with the deposit insurance application process and the path by which to obtain deposit insurance. The handbook offers, among other things, guidance on the three phases of establishing an insured institution: pre-filing activities, the application process and pre-opening activities.
Commentary
What is interesting about this publication is that it would seem to have no readership. There are virtually no new banks. See Federal Reserve Bank of Richmond, "Explaining the Decline in the Number of Banks since the Great Recession"; see also George Sutton, "What Dearth of New Banks Means for the Industry's Future" (American Banker). Thus, the really significant question is not how does one start a new bank, but, rather, why does no one want to do so?