The Federal Deposit Insurance Corporation (FDIC) on April 6th rescinded Financial Institution Letter (FIL) 50-2009, Enhanced Supervisory Procedures for Newly Insured FDIC-Supervised Depository Institutions.
The FIL, among other measures, extended the de novo period for newly organized, state nonmember institutions from three to seven years for examinations, capital maintenance, and other requirements. It was issued as a result of an elevated number of newly insured institutions that had either failed or had been identified as problem banks during the financial crisis of the last ten years.
Since the issuance of the guidance, the FDIC adopted regulations and guidance that apply to all supervised institutions to strengthen their resiliency and risk-management practices. Further, the FDIC has enhanced its programs and procedures through a more forward-looking approach to supervision. Collectively, the processes and guidance address the supervisory objectives of the 2009 FIL.
FDIC Chairman, Martin J. Gruenberg recently said, “The entry of new banks has helped to preserver the vitality of the community banking sector over time. De novo institutions fill important gaps in our local banking markets, providing credit and services to communities that may be overlooked by larger institutions. The FDIC welcomes applications for deposit insurance.”
In addition, the FDIC issued FIL-24-2016 to provide guidance in the form of supplemental “Questions and Answers” (Q&As) to aid applicants in developing proposals for deposit insurance. The supplemental Q&As, which address business planning, provide additional transparency to the application process and supplement the guidance issued November 20, 2014, through Financial Institution Letter (FIL) 56-2014.
ICBA’s statement of FDIC’s New De Novo Policy