The Federal Deposit Insurance Corporation on Tuesday approved a deposit insurance application for Erebor Bank, a de novo national bank founded by Palmer Luckey, founder of Oculus VR and Anduril Industries, and funded by Peter Thiel's Founders Fund and Joe Lonsdale's 8VC.
The Office of the Comptroller of the Currency gave Erebor's organizers
Erebor still awaits its full charter, which it's likely to receive in 2026.
The bank, which will be headquartered in Columbus, Ohio, plans to provide deposit and lending products to businesses and individuals in the technology, payment systems, investment and defense industries, including virtual currency market participants. It also plans to mint and burn stablecoins and lend against virtual currencies.
Erebor will operate 24 a day, seven days a week, 365 days a year and have no branches. Its Newport Beach, California-based engineers are building a new core system from scratch.
"It's a complete rethinking, from basically a blank piece of paper, what would you do for a bank in 2026," Erebor Bank President Michael Hagedorn said in a recent interview.
According to the FDIC approval order, the bank will start with $276 million of capital and be required to maintain a capital leverage ratio of 12% or more during its first three years.
Michele Alt, managing director of Klaros Group, was not surprised by the FDIC approval.
"It would be highly unusual for FDIC to deny FDIC insurance subsequent to approval by the chartering authority," she said. "That said, I assume that the FDIC and OCC cooperated in review of Erebor's charter and FDIC insurance application, and that any concerns FDIC had were addressed prior to OCC's approval."
Alt also was unsurprised at the speed of the approvals. Both Comptroller of the Currency Jonathan Gould and Acting FDIC Chairman Travis Hill "have publicly opined on their interest in new bank formation and openness to innovation," she said.
