Applicants Race To Secure National Bank Charters

The current regulatory regime is more favorable to getting a de novo application approved and new legislation is looking to make the process even easier to form a community bank. But that doesn’t mean the standards for getting a new bank charter approved has diminished.

The Office of the Comptroller of the Currency put out a notice last month meant to clarify “the standards for its decisions on filings.” The regulator emphasized that “it is paramount that filings contain all information necessary for the OCC to evaluate the filing as part of the initial submission.” If an application is determined to be lacking, it could be returned to the applicant.

The OCC’s statement specifically mentioned “this includes where the organizers of a de novo charter have not demonstrated that all products and services have been defined with particularity, including how they will be operationalized, or have not fully defined the associated governance, risk management, and compliance management infrastructure to manage these products and services.”

Experts speculated that firms seeking a de novo charter could be rushing their applications and maybe even using artificial intelligence to help write it. This could have led to applicants missing critical information or providing a lackluster analysis.

“For the OCC in an almost exacerbated notice to say, ‘Don’t give us your slop’ is telling,” says Max Bonici, a partner at the law firm Davis Wright Tremaine. “But I still think it is good news for people who are serious and well prepared. There has never been a better time to get a federal bank charter.”

The OCC did not respond to an interview request.

Crypto Applications Surge
Companies with business models tied to cryptocurrencies and digital assets are driving interest in new national bank charters, says Matthew Bisanz, a partner at the law firm Mayer Brown. There have been a dozen applications for national bank charters or conversions to national bank charters filed by entities looking to offer digital asset services from early January to mid-June 2026, according to the OCC.

Marketplace and online lenders have also been interested in becoming a de novo while other companies have also been seeking industrial loan charters, Bisanz says. Interest from groups looking to form more traditional community banks has been far more muted, given the challenges of running a small bank, he adds.

Right now, the OCC is dealing with a deluge of applications as companies try to get approved while President Donald Trump is in office, says Michele Alt, a partner at Klaros Group, a financial services advisory and investment firm. The regulatory environment under the Trump administration has been seen as more favorable to getting applications for de novos approved, she says. “There is sort of a race to the courthouse to get applications filed and processed during this administration,” she adds.

Both Alt and Bonici speculated that companies could be using AI to help write their bank charter applications to speed up the process. In general, it can take six to eight months to get conditional approval on an application and then another year to get final approval, Bisanz says.

Trump’s second term ends in January 2029. Applicants are likely hoping to get final — not just conditional approval — before then. After President Joe Biden took office in January 2017, some companies that had received conditional approval on charter applications ended up not receiving final approval, Alt and Bisanz say. Current applicants are likely looking to learn from that and ensure they are completely done before the next administration takes over.

In an ideal world, a firm or its outside legal counsel or adviser would have a conversation with the OCC about their business plan before submitting their charter application, Bonici says. That can signal that the company is serious about getting a charter and allow for the regulator to gain a better understanding of the company’s business model. But some executives, who don’t have a banking background, are blindsided by how arduous the approval process can be. “It is hard for innovators,” Bonici says. “They have a seemingly firm view of what the timeframe should be, and things don’t always happen that way. If you are dealing with a former bank executive or someone from the banking industry, they understand this.”

Some of the bank charter applications could look good on the surface, but once a veteran regulator starts boring into the details, it’s lacking, Alt says. For instance, a national bank charter application should have a robust analysis of how the company’s business model would do during forecasted economic scenarios. There should also be a detailed discussion of risk management. This is likely where some of the applicants are struggling, Alt says. “AI can spit out an application in a few minutes, but it can’t do the critical analysis that underpins it,” she adds.

Startup Help From Congress
Besides the push for national charters from technology firms and others, there has been a renewed desire to spur interest in creating more traditional banks. De novos formation was also included in the 21st Century ROAD to Housing Act, a sweeping bipartisan bill meant to address the affordability of housing. Tucked inside the legislation was a call for federal regulators to encourage new community financial institutions by streamlining the application process and improving coordination. There was also a directive for federal regulators to pilot a two-year phase-in period for capital requirements and to allow for flexibility to modify approved business plans.

The legislation seems more aimed at trying to spur more traditional de novo formation, as opposed to fintechs and other types of firms’ seeking a banking charter, Bisanz says. However, there are barriers to traditional banks opening, and it’s unclear whether the directives in the housing bill do much to encourage more new banks. For instance, most consumers have access to all of the credit products they could want, so finding a path forward that is profitable can be difficult for a new bank.

Some bankers try the acquisition route instead. Earlier this year, a group of investors led by former Iberiabank executives purchased MC Bancshares in Morgan City, Louisiana. The group included Daryl Byrd, who previously led Iberiabank Corp. and is now serving as CEO and chairman of MC Bancshares. It also includes Mark Tipton, who had been the Georgia regional president at Iberiabank and is president of the $490 million M C Bank & Trust Co. They raised more than $225 million through a friends-and-family capital raise for the acquisition.

Tipton said that the acquisition allows the team to leverage the bank’s existing assets and infrastructure to grow. “It helps you jumpstart your business plan,” he adds. “They have an infrastructure already there. When you do a de novo, you are literally starting from zero.”