America is Chartering Banks Again…

For most of the last fifteen years, the United States stopped approving new banks. Before the 2008 crisis, roughly 150 new banks, of all sizes and business focuses, were chartered and opened each year. Through the 2010s that number collapsed to an average of about six. An entire generation of founders, fintechs and foreign banking groups came of age in a market where a new charter was, in practice, almost unavailable.

The data

That has changed, at least for now. Application activity is at unprecedented levels. The federal banking regulators have publicly moved to speed and simplify the de novo and foreign bank branch approval process, signaling that they want to see more new banks and branches formed. Through federal and state special purpose charters, fintechs and payments companies—in particular—are pursuing charters in order to reach the banking system directly rather than through a sponsor. After a long closure, the window is open again, but if interested parties do not act quickly, they may find the window may be closing again before too long.

Why a charter is different

A charter is not simply a license. It is the difference between owning access to the banking system and renting it. A firm that operates through a sponsor bank or a correspondent holds its access at the discretion of a partner, on terms that can change. A chartered institution holds that access in its own name, under direct supervision. For a non-U.S. bank, a U.S. charter or chartered vehicle is the most complete form of onshore standing available.

A narrow, real opening

Windows like this do not stay open indefinitely. The current environment combines rebounding application volumes with a regulator that has said it wants more formation. That is a specific, time-bound opportunity, and it favors the institutions that are prepared: those that understand which vehicle fits their strategy, that have their capital and governance ready, and that can move while the door is open.

In context

The counterintuitive part is the timing. After a decade in which the sensible assumption was that a new U.S. charter was out of reach, the sensible assumption has flipped. For founders and foreign groups that had written off the option, it is worth revisiting now; not regretting inaction during the next U.S. Administration.

Come speak with Atlantis

Atlantis has direct, hands-on experience gaining charters and implementing the operations of U.S. branches of foreign and de-novo banks and fintechs. If you have ever considered holding your own access rather than renting it, this is the moment to test the idea. Come speak with Atlantis.