FDIC Shortens Timeframe for Enhanced Supervision of New Banks, Releases Guidance on Deposit Insurance Applications

During the financial crisis, a number of newly insured institutions either failed or were identified as problem banks. In 2009, the FDIC responded by issuing Financial Institution Letter 50-2009, Enhanced Supervisory Procedures for Newly Insured FDIC-Supervised Depository Institutions. which extended the de novo period for newly organized, state nonmember institutions from three to seven years for examinations, capital maintenance, and other requirements. The FDIC now rescinded the letter recognizing that "[t]he entry of new banks has helped to preserve the vitality of the community banking sector over time."

The FDIC also issued a supplement to its November 2014 Statement of Policy on Applications for Deposit Insurance. The supplement is intended to aid applicants in developing proposals for deposit insurance and provide transparency in the application process. The questions and answers in the supplement focus on the development of business plans for deposit insurance applications.