FDIC introduces contingent approval for de novo applicants

• Key insight: The FDIC is adopting a two-phased process, allowing new banks that satisfy requirements to receive an interim approval within 120 days of applying.

• Expert quote: "A healthy pipeline of new entrants is critical to the long-term vitality of the banking sector, particularly for community banks." —Travis Hill, FDIC chair 

• Forward look: De novo hopefuls that apply after Aug. 15 will be subject to the new standard. 

The Federal Deposit Insurance Corp. on Monday announced a new conditional approval phase as part of a two-step approval process for reviewing de novo deposit-insurance applications received after Aug. 15, 2026.

Under the new process — similar to that already in place at the Office of the Comptroller of the Currency — the FDIC will grant applicants that satisfy applicable requirements contingent authorization within 120 days of applying and provide a final approval decision within a year of receiving subsequent supplemental application documents.

"Improving the de novo process and encouraging more new bank formation has been a key priority for the FDIC," said Chairman Travis Hill.  "Today's action is one of several steps the FDIC has been working on in furtherance of this goal. A healthy pipeline of new entrants is critical to the long-term vitality of the banking sector, particularly for community banks."

Under the revised procedure, applicants that have received contingent authorization will have a year to complete the organizational work required to open the bank, before the agency gives satisfactory applicants a green light to open for business. The FDIC says it "welcomes applications from all types of proposed insured depository institutions that can present a viable business plan that is consistent with favorable resolution of the statutory factors."

The agency encouraged bank organizers to meet and consult with FDIC staff prior to submitting their application, according to a release.

"A pre-filing meeting promotes open communication between the applicant and the FDIC regarding the specifics of the potential application, regulatory expectations, and the application process," the agency wrote. "During the prefiling meeting, a dedicated FDIC Case Manager will be assigned to serve as the primary point of contact for the organizers."

"Throughout the application process, all information, including meeting materials and responses to future information requests, should be provided simultaneously to the FDIC and chartering authority when possible," the agency continued. 

Licenses and charters

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The move comes at a time when the Trump administration is encouraging new banks to apply through easing of regulations on applicants and sticking to strict timelines for application decisions. Hill has signaled a more flexible stance on new bank applications and deposit insurance approvals, citing a drop in yearly new charters following regulations in response to the 2008 financial crisis. 

Regulators' openness to a faster charter application process has already triggered a wave of fintech bank charter applications and approvals. While some of the most notable applications have been with the OCC for national trust charters, the FDIC has also seen an uptick in applications for industrial-loan company charters.

The agency has approved a number of deposit insurance applications so far this year, including those for industrial loan arms of carmakers Ford and GM, an industrial bank application from Edward Jones, Stellantis, and Augustus National Bank.

The agency has also proposed slashing what smaller banks will be required to pay for deposit insurance, increasing the asset threshold for institutions subject to the large-bank standard from $10 billion to $30 billion, indexed for inflation. Small institutions would see their assessment rates decrease by two basis points; large and highly complex institutions would enjoy a one-basis-point reduction. According to FDIC staff, the changes would reduce industry assessments by roughly $4 billion per year while allowing the Deposit Insurance Fund to continue growing at a slower pace.