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How To Apply For a Bank Charter


If you’re an entrepreneur ready to take your business to the next level, chartering a bank may be the right move for you. This guide will walk you through everything you need to know about bank charters and how to apply for one. 


Steps to Charter a Bank

To charter a bank, you must complete three main steps:

  1. Understand the benefits of chartering a bank.
  2. Position your bank for charter approval.
  3. Submit a charter application to the FDIC.

Let’s look at each in detail.


Benefits of Chartering a Bank

Many benefits come with chartering a bank. For one, it allows you to offer your customers a wider range of products and services. This includes things like loans, credit cards, and other financial products. Chartering a bank also gives you more control over your business, as well as increased prestige and reputation.

Chartering a bank allows you to raise capital more easily, creates opportunities for organic growth, and provides access to the Federal Reserve’s discount window. All of these factors can help your business thrive.

If you do not charter your bank, you will likely be restricted to offering only checking and savings accounts. This means that you’ll miss out on potential revenue from other financial products and services.


Positioning Your Bank for Charter Approval

When you’re ready to apply for a bank charter, there are a few things you’ll need to do to prepare. First, you’ll need to have a strong business plan in place. This should include your financial projections, product offerings, and marketing strategy. For example, if you plan to offer loans, you’ll need a solid plan for underwriting and servicing those loans.

You’ll also need to demonstrate that you have the capital to support your charter application. Do this by putting together a capitalization plan that outlines how you’ll raise the required funds. Some banks choose to issue stock, while others rely on loans or private investment.

You’ll need to assemble a team of experienced professionals who can help you through the chartering process. This team should include bankers, accountants, lawyers, and other experts who can help you navigate the complexities of chartering a bank.

Lastly, you’ll need support from local officials and the business community. This will show regulators that you have strong community backing and that your charter application is serious.


Submitting a Charter Application to the FDIC

Once you’ve gathered all the necessary information and documentation, you’re ready to submit your charter application to the FDIC. The FDIC will then review your application and decide whether to approve your charter.

Application information includes:

  • Your business plan
  • Capitalization plan
  • Financial projections
  • Product offerings
  • Marketing strategy
  • Organizational chart
  • List of directors and officers
  • Résumés of key personnel
  • A detailed description of your banking experience
  • List of state and federal permits and licenses

The FDIC will also consider your charter application in light of the overall economic conditions in your market area. So, if there’s a lot of competition or unfavorable economic conditions, your chances of approval can shift.

Overcome challenges by demonstrating a clear need for your charter in the market and having a well-thought-out business plan. You should also be prepared to show that you have the necessary experience and capital to support your charter application.

The application process takes six to nine months, so be patient as you await a decision from the FDIC. While you wait, continue to build your team and work on finalizing your business plan.


Apply for a Bank Charter

Chartering a bank is a great way to take your business to the next level. By following the steps outlined in this guide, you’ll be well on your way to success.