On August 28, 2023, Max Bonici was quoted in S&P Global Market Intelligence on financial technology (fintech) companies moving away from bank charters as a result of the lengthy application process and challenging requirements. According to the article, no fintech companies have completed the bank charter application process in nearly three years.
“The bar for approval is already high and will only rise more after the March turmoil,” said Bonici, contextualizing the industry trend. “There is no way any of the federal bank regulators coming out of the 2023 banking crisis are going to want to pose any new risk in any way to the industry.”
Fintech companies considering a charter application must also consider the low odds of securing an ILC or OCC charter. The FDIC, according to Bonici, is likely to put ILC applications on the back burner, in favor of more timely matters such as capital rule changes. “I think, right now, protecting the Deposit Insurance Fund and keeping actual banks safe and sound is the order of the day,” Bonici added.
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