On June 29, the FFIEC issued a statement reaffirming support for the formation of new (de novo) depository institutions and said its member entities will continue efforts to coordinate regulators, streamline application processes, and provide applicants with greater transparency on expectations and timelines. The FFIEC said the number of depository institutions in the U.S. has fallen steadily over the past three decades while the banking system has grown significantly in asset size; the agency noted that de novo bank formations have stagnated since the 2008 financial crisis, contributing to this overall decline. The agency also noted that unnecessary delays, costs or unpredictability in application processes may discourage potential organizers from seeking to form new depository institutions.

The FFIEC asserted that de novo depository institutions help maintain competition in banking, foster innovation in products and services, broaden consumer access to credit and other banking services, and support local communities and small businesses’ access to financial services. Additionally, the FFIEC observed that de novo bank formations enhance the resilience and diversity of the financial system by distributing risk across diverse markets, business models, and institution sizes, thus mitigating the risks associated with excessive market concentration.