FDIC Overhauls De Novo Deposit Insurance Application With Two-Phase Review
The Federal Deposit Insurance Corp. announced a two-phase deposit insurance application process, effective for applications received after Saturday. Organizers meeting certain requirements can expect conditional approval within 120 days, followed by full approval within the next year after submitting additional information. The move aims to streamline de novo bank formation, aligning with the 21st Century ROAD to Housing Act and prior OCC practices.
The Federal Deposit Insurance Corp. is rolling out a two-phase deposit insurance application process, under which bank organizers who satisfy specified criteria can anticipate conditional approval within 120 days.
Following that milestone, organizers may receive full approval within the subsequent year, provided they submit additional information and complete other essential steps, the FDIC announced Monday.
The revised procedure applies to applications received after Saturday.
“Improving the de novo process and encouraging more new bank formation has been a key priority for the FDIC,” agency Chair Travis Hill said in a statement. Monday’s development “is one of several steps the FDIC has been working on in furtherance of this goal,” Hill added. “A healthy pipeline of new entrants is critical to the long-term vitality of the banking sector, particularly for community banks.”
The two-phase system is designed to expedite application reviews and enhance overall efficiency, according to the FDIC. “The two-phase process will provide organizing groups clarity within a few months, before they expend significant time and financial resources on capital raising, staffing, infrastructure development and other start-up activities,” the agency said.
Hill had previously flagged the need for reform. In April 2025, he cited “reevaluating the application process” as a cornerstone of addressing the dearth of new bank formation.
The FDIC plans to coordinate with chartering authorities, including the Office of the Comptroller of the Currency and state agencies, “throughout the application process to promote efficiency, avoid duplication and ensure timely action,” it said. The OCC had earlier instituted a conditional approval phase in its own application evaluation process.
The FDIC characterized the two-phase approach as “generally consistent with the 21st Century ROAD to Housing Act,” which directs federal banking agencies to review and streamline the de novo application process.
Agency employees will be available to meet with bank organizers to answer questions at any stage, the FDIC said. In a document outlining the revised process, the FDIC encouraged organizers to meet with agency staff before submitting their deposit insurance application.
“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 said. A dedicated FDIC case manager will be assigned during the pre-filing meeting and will serve as the organizers’ primary point of contact.
“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 added.
In a related move, the FDIC in June proposed easing the deposit insurance burden for smaller banks. Under that plan, the asset threshold for applying the large-bank standard would rise to $30 billion from $10 billion. Small banks’ deposit insurance assessment rates would drop by two basis points, compared with one basis point for large or complex institutions. Overall, industry assessments would decline by roughly $4 billion per year, the FDIC said.